Executives overseeing China’s major semiconductor industry fund are under investigation

July 29, 2022 0 Comments

Ding Wenwu, president of the China Integrated Circuit Industry Investment Fund, is under investigation, Caixin reported, citing sources familiar with the matter.

Ding has served as the president of the fund since its inception. Previously, he was the Deputy Director of the Electronic Information Department of the Ministry of Industry and Information Technology.

The executive was last seen in public during the 6th Jiwei Semiconductor Summit in Xiamen, Fujian, on July 16. At the summit, he delivered a speech, saying that at present, the domestic and international climate is harsh, complicated, and ever-changing, which brings both challenges and opportunities to China’s semiconductor industry.

Ding also pointed out that companies in this sector have enjoyed strong valuations for the previous two years, but with the current cooling of capital markets, that has changed.

With a total of 98.72 billion yuan ($14.63 billion) in registered capital, the fund was launched in 2014 by the Ministry of Finance, China Development Bank Capital (CDB Capital), as well as several state-owned firms including China Mobile and China Tobacco. 

Beijing’s ambitions to grow China’s semiconductor sector rely heavily on the state-backed fund, sometimes referred to as the “Big Fund”. Sino IC Capital, a subsidiary of CDB Capital, is responsible for managing the assets under the fund.

This is not the first time that executives linked to Big Fund have been looked into. July 15, Lu Jun, former chief executive of Sino IC Capital has been put under investigation by China’s top anti-corruption watchdog.  In November 2021, Gao Songtao, the former vice president of Sino IC Capital, was investigated by the Central Commission for Discipline Inspection on suspicion of insider trading in a listed semiconductor company.

In order to support 5G, artificial intelligence, and improve semiconductor supply capabilities, the China Integrated Circuit Industry Investment Fund Phase II, also known as the Big Fund II, was launched in October 2019 with a registered capital of 204.15 billion yuan ($30.26 billion).

China has always been the largest market for semiconductors, and it is now also producing more of them than ever before. According to the National Bureau of Statistics, China has manufactured 139.9 billion integrated circuits so far this year, an increase of 48.3% compared to the first five months of 2020.

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