The Chinese government is planning a large-scale assault on the semiconductor industry, with ambitions to direct investment of some 200 billion yuan - $31.5 billion - into Chinese chip makers.
That's according to Bloomberg, which claims that the investments are intended to make China a leader in the global semiconductor industry.
Bloomberg's sources claim that the China Integrated Circuit Industry Investment Fund Co is currently in talks with government officials to raise money.
The state-backed organisation wants to find at least 150 billion yuan to help fund semiconductor plants. If the organisation is able to raise its desired amount of funding, it will start investing in new projects and companies later this year.
Looking to back a diverse range of projects, the fund will invest in areas such as processor design, manufacturing, testing and packaging.
To date, the firm has backed more than 20 listed companies, including Semiconductor Manufacturing International Corp and ZTE.
The funding is intended to accelerate the growth of the Chinese technology industry, said the sources. Officials are already working on plans to spend $150 billion on improving China's design and manufacturing abilities.
Since launching in 2014, much of the fund's activities have been secretive. But it is widely believed to form a part of the Chinese governments development strategy around technology.
The second fund will call on the support of central and local government organisations. It is likely that government-supported enterprises will lend their help, too.
Today's news comes as components maker Tsinghua Unigroup plans to spend $22 billion on acquiring new businesses and expanding its manufacturing capabilities.
Qi Lian, joint president and chief executive of the firm's storage business, told Bloomberg: "We want to be a balancer against the international giants, which means delivering self-made technologies and growing the market share of made-in-China products.
"To achieve this goal, we are building up our own R&D and also keeping an eye on global technology collaboration."
The move will concern semiconductor companies in Taiwan, South Korea and Japan, as well as Micron Technology, Intel and AMD in the US, which have to invest billions of dollars upfront in each new generation of technology.
The semiconductor industry, particularly in memory chips, tends to go through highly cyclical phases, with periods of over-supply caused by excessive investment wiping out profitability.
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