China significantly upped the ante in its efforts to spur domestic semiconductor production, earmarking CNY344 billion ($47.5 billion) in support for local chip companies, just days after South Korea detailed plans for a $9.1 billion warchest.

The Chinese government last week established the third National Integrated Circuit Industry Investment Fund, Securities Times reported. The fund previously raised CNY200 billion in 2019 and CNY138.7 billion in 2014.

The third phase fund is backed by the Ministry of Finance, China Development Bank Financial, the Industrial and Commercial Bank of China, China Construction Bank and the bank of China. In total 26 state-owned and private companies hold an interest, the news outlet wrote.

Widening sanctions led by the US to restrict China’s access to advanced chips and chipmaking equipment encouraged the country to boost domestic capabilities, as the government pushes for self-reliance.

Despite restrictions on the export of advanced chipmaking machinery to the mainland, major overseas suppliers of chipmaking machinery, including ASML and Lam Research, reported a surge in sales to the nation in the opening quarter. In addition, state-owed Semiconductor Manufacturing International Corp rose to third place in the global foundry market in Q1 from fifth a year earlier, data from Counterpoint Research reported.

Reuters suggested in September 2023 the government was preparing to launch a CNY300 billion chip fund.