the Chip Big Fund is systematically divesting semiconductor holdings

context: The National Integrated Circuit Fund (the Big Fund) was established in 2014 to boost the PRC's domestic chip capabilities. Phase I raised C¥138.72 bn, investing primarily in manufacturing giants like SMIC and Yangtze Memory. Phase II launched in 2019 with C¥204.15 bn during escalating US–PRC tech tensions. Since July 2022, corruption scandals brought down multiple executives including Lu Jun 路军 former president and Ding Wenwu 丁文武 former general manager, who remain awaiting trial. Phase I is now in harvest mode; Phase II is in simultaneous investment and exit. Phase III, established May 2024 with C¥344 bn backed by the Ministry of Finance and major state banks, has taken over with a more cautious, chokepoint-focused mandate.

According to Caixin, the PRC's National Integrated Circuit Fund (the Big Fund) is systematically divesting semiconductor holdings in 2026, signalling a shift from state-led support to market-driven survival. The message: decade-long subsidies are ending; companies must now stand alone.

Since early February, the Big Fund has announced or completed the following reductions

  • Anlogic Technology: reducing up to 2 percent from current 5.73 percent
    • company losing C¥230–280 million in 2025, revenue down 15–22 percent y-o-y
  • Shanghai Siltronic: reducing up to 3 percent from 15.49 percent
    • originally held 22.86 percent as founding shareholder at 2020 IPO
  • Suzhou Centec: reduced from 14.6 percent to 14 percent
  • Telink Semiconductor: reduced from 6.93 percent to 5.97 percent
  • HiSilicon Microelectronics: Phase II reduced holdings to just under 5 percent

Multiple semiconductor investors cite the following reasons for the exits

  • Phase I and II have reached 11 and six years respectively; their historical mission is complete
  • post-corruption crackdown, Phase III will be more cautious
  • Phase III expected to focus on genuine 'chokepoint' sectors (materials, equipment, core technologies), not mature, highly marketised segments
  • long-term, patient capital aimed at substantive contributions to the PRC's semiconductor advancement