China’s semiconductor industry is strengthening its competitiveness through a “one-team model” in which the central and local governments, state-owned financial institutions and companies divide responsibilities ranging from funding and factory construction to infrastructure development. In South Korea, by contrast, individual companies bear the costs of investment, employment and technology development, while delays in infrastructure supply have been identified as a challenge.
The Big Fund is a program that symbolizes China’s efforts to foster its semiconductor industry. It raised RMB 138.7 billion in its first phase in 2014, RMB 204 billion in its second phase in 2019 and RMB 344 billion in its third phase in 2024, bringing the total to RMB 686.7 billion. At recent exchange rates, this is equivalent to around ¥15 trillion.
The Ministry of Finance, state-owned enterprises and major state-owned banks participate in the Big Fund, providing long-term financing under the central government’s industrial strategy, while local governments support projects with land, electricity and industrial water. The funds are invested in SMIC, Hua Hong Semiconductor, YMTC and others, creating a structure in which companies do not bear the risks alone.
One example is CXMT, which ranked fourth in the global DRAM market after 10 years in operation. Although it recorded net losses of RMB 21.13 billion over the three years through 2025, it allocated RMB 185.2 billion, equivalent to twice its revenue, to research and development and capital investment. Hefei in Anhui Province is also home to more than 500 integrated-circuit-related companies and what is known as “patient capital.”
In South Korea, Samsung Electronics and SK hynix are responsible not only for investment, employment and technology development, but also for supporting partner companies and creating jobs in local communities. The government has prepared private investment, low-interest loans and a semiconductor ecosystem fund for the southern Gyeonggi semiconductor mega-cluster. However, concerns have been raised that infrastructure supply could be delayed.