Catenaa, Friday, July 04, 2025-China is recalibrating its $50 billion National Integrated Circuit Industry Investment Fund, known as Big Fund III, to focus on overcoming critical gaps in its semiconductor industry as the US tightens export restrictions.
The fund will prioritize domestic development of lithography tools and electronic design automation (EDA) software, areas where Chinese companies lag behind global leaders.
Originally intended to support a broad range of chipmaking equipment and the semiconductor ecosystem, Big Fund III now targets lithography machines, the most advanced fabrication tools currently restricted by U.S. export controls affecting suppliers like ASML, Applied Materials, and Tokyo Electron.
China already produces world-class equipment in some fab tool categories but faces a significant shortfall in lithography technology.
Additionally, new US export rules require companies like Cadence and Synopsys to obtain licenses to sell advanced EDA software in China.
To reduce dependence, the fund will back local EDA developers, including firms such as Shanghai Micro Electronics Equipment and Empyrean Technology.
Industry observers speculate Huawei may pursue domestic lithography systems independently, though without direct Big Fund III support.
Fund managers also plan to encourage mergers and acquisitions among domestic companies to create stronger, more innovative entities.
The fund has only raised part of its planned $47 billion amid more selective resource allocation, but officials expect the shortfall to be temporary.
