Nanjing is set to turn itself into a chip mecca by setting up a $20 billion investment fund for its integrated circuits industry. The historical capital of China is hoping that revenue from the sector will reach $150 billion by 2025.

The Nanjing Integrated Circuit Industry Investment Fund is expected to benefit chip manufacturers and downstream companies, which will gain economically from domestically produced chips. It will be guided by localization, specialization, and better use of capital, and aims to promote the local IC industry, local media reports. The timeline for the fund was not specified.

Nanjing has been the focus of growing attention in China’s chip-making industry. In early July, Huatian Technologies announced a three-phase development plan for an IC packaging an testing plant in the city. The company plans to spend a total of $8 billion on the project that will focus on memory and artificial intelligence chips, as well as microelectromechanical systems (MEMS).

In addition to Huatian, Taiwanese chipmaking giant TSMC and Tsinghua Unigroup have built plants in Nanjing. In 2016, TSMC signed an agreement with the municipal government to make a $3 billion investment in the city in the form of a design service center.

In the past few months, China’s reliance on foreign-made chips has called to attention. The temporary US ban on ZTE purchasing American-made components caused collective reflection on the county’s use of technology that was not domestically made. Local experts said the company should have been more self-sufficient (in Chinese).

Additionally, Chinese officials launched investigations into American and South Korean chipmakers for suspected price-fixing. Investigators were concerned about the increasing prices of chips from Samsung, SK Hynix, and US-based Micron.

China currently sources around 90% of the semiconductors used in domestically-produced products from foreign companies, accounting for 60% of the world’s chip purchases.

Christopher Udemans is TechNode's former Shanghai-based data and graphics reporter. He covered Chinese artificial intelligence, mobility, cleantech, and cybersecurity.

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