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China to invest $1.9bn in local chipmaker YMTC

He chinese government going to invest $1.9 billion in YMTC (Yangtze Memory Technologies Co), the country’s largest chip maker. According to Bloomberg, the purpose of this investment is to give a growth push for its semiconductor manufacturing sectorwhich is currently going through certain difficulties due to the sanctions that the United States has imposed on it.

The entity in charge of injecting the money into the company is the National Investment Fund in the China Integrated Circuits Sector. This is a fund backed by the Chinese government and also known as The Grand Fund. The scale of the investment gives an idea of ​​the effort that China is going to put into growing the local chip manufacturing and design sector, with the aim of overcoming the barriers it faces due to US restrictions.

Last month, the Political Office of the Communist Party of China Central Committee conducted the third Collective Study on the Advancement of Basic Research, according to a report by the Xinghua News agency. In it, the Chinese President Xi Jinpingurged the country to accelerate scientific research in order to be self-sufficient in vital technologies.

The President stressed that party committees, and the government, at all levels, should strengthen basic research, improve overall coordination, increase support for policies and regulations, and promote the development of high-quality research. In addition, the Chinese Academy of Science has developed a plan to create a dedicated semiconductor sector in China that is capable of overcoming US-imposed sanctions.

This study, which among other things discusses how and how China should step up to increase semiconductor research, points to China’s plans to win the technology battle against the United States.

As China strives to be self-sufficient, the United States seeks to prevent Western technology from being used to upgrade the Chinese military. Last Thursday, the Biden Administration added 37 other companies and entities to a trade block list. Among them are several divisions of the Chinese cloud computing company Inspur. According to the Commerce Department, the company is engaged in procuring, or trying to source, products from states to support China’s military modernization efforts.

Among other things, these entities and companies were added by «among other activities, contributing to Russia’s military and/or defense industrial base, supporting the military modernization of the People’s Republic of China, and facilitating or implicating human rights abuses in Burma and the People’s Republic from ChinaAccording to the US Department of Commerce.

In early October, the United States put in place export controls, which prevent American companies from selling advanced semiconductors, as well as the equipment needed to manufacture them, to some Chinese manufacturers, unless they have a license. special to be able to do it.

Additionally, in mid-December, the Biden Administration increased these restrictions to include 36 more Chinese manufacturers on the list barring them from having access to US chip technology. Among them was YMTC, the company in which the Chinese government has just made the aforementioned investment.

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