China names new head for state-backed chip fund

China appointed an ex-government official to lead a state-backed investment fund focused on the chipmaking sector as it moves to support its domestic industry in the face of expanding export sanctions, Caixin reported.

Zhang Xin was previously an official at the Ministry of Industry and Information Technology and replaced Ding Wenwu as chief of the National Integrated Circuit Industry Investment Fund, also known as the Big Fund, the news outlet wrote, citing data from Chinese corporate risk provider TianYanCha.

He also took over as head of a second fund, the China Integrated Circuit Industry Investment Fund Phase II.

The Big Fund was established in 2014 and is China’s main conduit for allocating government funds to chipmakers. It faced a scandal in 2022 when managers were accused of corruption, with several officials dismissed.

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After a shake-up, Bloomberg reported the fund committed capital to memory chipmaker Yangtze Memory Technologies, which it stated is one of China’s largest memory chipmakers and was put on a US list of companies banned from importing certain goods in late 2022.

At the time, China prepared a CNY1 trillion ($145 billion) support package to support its chip industry in the face of the US restrictions on acquiring advanced semiconductors and chipmaking equipment.

In addition to pressuring Japan and the Netherlands to support wider restrictions on the export of machinery to China, the US boosted aid for the chip sector in moves including passing of the CHIPS and Science Act, which includes $52 billion in funding to promote domestic research and manufacturing.