Ministry official to lead China’s troubled ‘Big Fund’

News | March 14, 2023

By Peter Clarke

China semiconductor

Zhang Xin, a former inspector at China’s Ministry of Industry and Information Technology, has been appointed general manager of the China Integrated Circuit Industry Investment Fund, otherwise known as The Big Fund, according to China’s Caixin.

Zhang replaces Ding Wenwu, who was one of group of executives that came under investigation by the country’s corruption watchdog in July 2022 (see Another China ‘Big Fund’ executive is detained).

The China Integrated Circuit Industry Investment Fund was formed in 2014 with nearly 100 billion yuan (about US$14.2 billion) in registered assets. Its first round of investment, which closed in 2018, was worth 138.7 billion yuan and back such significant Chinese chip companies as Semiconductor Manufacturing International Corp. (SMIC), Yangtze, Memory Technology Corp. (YMTC) and Tsinghua Unisoc.

Problems gathered for the fund in its second investment phase of about 200 billion yuan (about US$28.5 billion), for which Sino IC Capital was appointed the sole fund manager. China’s National Audit Office has been investigating how funds were dispersed and several Sino IC Capital executives have been detained along with executives at companies the fund invested in.

Some of the fund’s biggest investments have included China’s chip companies considered more successful; such as ChangXin Memory Technologies Inc. (CXMT), YMTC and SMIC. The fund has recently invested yet more capital into YMTC, which is struggling under the double blow of falling memory component prices and US sanctions limiting access to semiconductor manufacturing equipment.