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Report: China raising up to 200B yuan for semiconductors

China plans to raise up to 200 billion yuan to invest in Chinese chip companies, as part of a plan to achieve a leading position in the global semiconductor industry, Bloomberg News reported March 1, citing "people familiar with the matter."

State-backed China Integrated Circuit Industry Investment Fund Co., Ltd. is discussing with government agencies and enterprises to raise at least 150 billion yuan and up to 200 billion yuan for its second fund vehicle, according to the report. The plan is to start deploying capital in the second half, focusing on a wide range of sectors from processor design and manufacturing to chip testing and packaging.

Huawei Technologies Co. Ltd., ZTE Corp. and the Tsinghua Group, among others, could benefit from the move.

The first fund, worth about 140 billion yuan, deployed capital at 20 listed companies, including ZTE and contract chipmaker Semiconductor Manufacturing International Corp., the people said.

China wants to reduce its reliance on roughly US$200 billion in annual semiconductor imports amid concerns over national security and the development of the technology sector in China, Bloomberg News reported.

The country intends to spend about US$150 billion over 10 years to dominate the design and manufacturing side of things, a plan that the U.S. believes may not bode well for American chipmakers, the report noted.

As of Feb. 28, US$1 was equivalent to 6.33 Chinese yuan.