Exclusive: Chip wars - China closing in on second $19 billion semiconductor fund: sources

HONG KONG/SHANGHAI (Reuters) - China’s state-backed semiconductor finance is near to ending a 120 billion dollars yuan ($18.98 billion)investment circular for a second finance to support the household processor market and help cut dependence on imports amongst a discoloration business tie with the U. s. Declares.

The Nationwide Incorporated Circuits Financial commitment Fund, also known as the “Big Fund”, is close to introducing the organization of a new finance that will concentrate on enhancing regional processor manufacturing and technological innovation, according to three those who information of the programs.

Reuters revealed this 30 days that China authorities were planning to speed up enhancing the household processor market, scared by business stress and U.S. penalties on ZTE Corp (000063.SZ)(0763.HK), any regional telecommunications equipment company, that has underscored China’s heavy dependence on brought in snacks.

China’s market ministry on Wed said the finance was increasing its second investment circular and that it accepted worldwide organizations to take part, without giving details.

The finance, which brought up around $22 billion dollars in its first trip, has been a target for U.S. political figures concerned that China companies could task processor leaders in the U. s. Declares like Qualcomm Corp (QCOM.O), a big provider to China companies.

China is still intensely dependent on brought in snacks, however, despite making the market a concern under a force by Chief executive Xi Jinping to boost China’s own high-tech areas, from robotics to energy source.

That dependency became obvious after the U. s. Declares smacked a 7-year ban this 30 days on sales of products – such as snacks – to ZTE, which California said had breached an contract achieved after it was captured unlawfully delivery goods to Iran.

ZTE, which uses snacks from Qualcomm in many of its mobile phones, has said the ban could endanger its success.

The second finance had been in the direction since before recent business issues and the ZTE case, individuals said, but added that China now intends to get more on the market overall because of the increasing business stress.

All three asked not to be known as due to the understanding of the matter. The Secretary of condition for Industry and Information Technological innovation and the Nationwide Incorporated Circuits Financial commitment Fund did not instantly react to demands for opinion.

CDB Investment Corp will be the main administrator for both the first and second resources, and will spend in the new circular, according to one of those who direct information. Potential traders in the second finance include regional government-backed resources and state-owned businesses, the individual said.

Calls to CDB Investment, your time and money arm of China suppliers Growth Bank, went un answered on Friday. The company did not instantly react to e-mailed demands for opinion.

A 4th individual said the new finance would concentrate on three areas: storage snacks, integrated routine design and substance semiconductors such as rubber carbide and gallium nitride.

China is hoping to develop regional processor technology following the preventing of several high-profile deals for worldwide processor companies in the U. s. Declares and European countries over national security concerns.

Some earlier reports have said the second semiconductor finance would raise between 150-200 billion dollars yuan. The resources said this was off the potential and that individuals were often vulnerable to overestimating the size of the finance to “make it sound scary”.

The U. s. Declares Trade Associate recommended China’s semiconductor plan, which contains national financing, in a report that approved U.S. Chief executive Brian Trump to impose up to $100 billion dollars in charges against China suppliers.

The Big Fund has previously spent in some 50 companies in the processor market, such as Hong Kong-listed Semiconductor Production International Corp (0981.HK) and Yangtze Memory Technologies, a 3D NAND display processor manufacturer.