(Yicai) May 28 -- The scope of China's third so-called Big Fund, recently set up to invest in the country's semiconductor industry, will be broader than the first two, with more companies across various sectors likely to receive support, according to industry insiders.

Big Fund III’s investment scope will include traditional equity investment and asset management and extend to venture capital fund management services, said Zhang Yi, chief executive and chief analyst at iiMedia Research.

“This change has significantly enhanced the flexibility and diversity of the fund's investment strategy,” Zhang said.

The third and largest phase of National Integrated Circuit Industry Investment Fund was incorporated on May 24 with a registered capital of CNY344 billion (USD47.5 billion). China has been ramping up efforts over the past decade to back the domestic semiconductor industry, particularly through the Big Fund, which is intended to boost the country’s technological self-sufficiency in the chip field.

The new fund sends a positive signal, Zhang said, adding that it will likely stimulate private and social capital investment and strategic planning in the integrated circuit supply chain and popular fields such as artificial intelligence, providing strong support for capital and resources to flow into the chip industry, he added.

Big Fund III will not only focus on capital appreciation, but will also strive to help companies improve their management level and operational efficiency, achieving sustainable development, Zhang pointed out.

The investments made by Big Fund I, incorporated in 2014 with CNY98.7 billion (USD13.6 billion), and Big Fund II, set up in 2019 with CNY200 billion (USD27.6 billion), were concentrated on semiconductor equipment and material companies, another industry insider told Yicai.

Big Fund III is expected to continue supporting these two segments while also prioritizing funding for high-value-added dynamic random-access memory chips, such as high bandwidth memory, the person added. With the development of the digital economy and the AI industry, computing power and memory chips are becoming key nodes in the semiconductor supply chain, the insider noted.

Zhang Xin, the legal representative of Big Fund III, is a former official at the Ministry of Industry and Information Technology, another industry source said. In February last year, he looked into and guided the third-generation chip industry in Beijing, so there is speculation that related companies are likely to receive investment from Big Fund III, the person said.

Big Fund is a national-level investment fund set up to boost the development of China's semiconductor industry. It aims to enhance the coordinated development between the upstream and downstream sectors of the supply chain through financial investments to improve the country's global competitiveness.

Editors: Tang Shihua, Martin Kadiev