The Big Fund was established in order to use government money to build a supply chain of chips made in China that would reduce reliance on the US. The fund is an example of how the Chinese government can support a strategic industry.
A total of $30 billion was poured into the industry over the course of eight years. It was ripe for corruption because the fund was driven by a political mission and not financial interests.
The idea of the Big Fund was to give money to industries that don't get funding from traditional sources. The first $20 billion funding round went after publicly listed companies and their subsidiaries, instead of startup companies, according to a tech analyst. These companies find it hard to make money because they have to invest a lot of time and money in chipmaking. They are less attractive to venture capitalists.
The Big Fund was ahead ofTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkiaTrademarkia In order to address the capacity gap in chip production, the central government decided to use public funding. The situation became urgent due to the US cutting off access to chips made with US technologies. Chinese tech companies are dependent on overseas suppliers like Taiwan's TSMC or the Netherlands' ASML. The US is an ally of those countries.
The US is trying to squeeze China's ability to access advanced chip technologies, even asking ASML to stop exporting older machines to China. That makes the Big Fund even more important.
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