Following legislation and major investments from the US and EU to strengthen the domestic chip manufacturing industry, and restrictions on the sale of high-end chips and tools to China, a 100% expected Chinese response will be brought. 

Reuters reported that the state-backed China Integrated Circuit Industry Investment Fund has made 3440 billion yuan (ド475 billion) of financing, which will be used to develop and achieve self-sufficiency in China's domestic chip manufacturing industry.

The Ministry of Finance of China is the largest contributor to the fund with a 17% stake, while the capital of the China Development Bank is the second largest shareholder with a 10.5% stake. The rest of the fund consists of 5 other contributors, including 17 major Chinese banks.

This is actually the 3rd stage of funding, known locally as the "big Fund". In 2014, the 1st round raisedド21.8 billion, and in 2019, the 2nd round raisedド2908,000. The third stage has taken on additional urgency after the escalation of a series of sanctions and bans on the sale of chips and equipment to China. The United States fears that its best technology could be used for Chinese military applications. These sanctions mean that China needs to invest actively, especially in order to catch up with the United States, following the passage of the Chip Law. Chip money has begun to flow into the financial resources of companies investing in domestic projects, including Samsung, Intel and TSMC. 

Reuters reports that the third stage of big fund investment will focus on the development of equipment used in chip manufacturing. China has already been blocked from buying extreme ultraviolet (EUV) tools from ASML in the Netherlands, and China is forced to develop its own equipment. It's not like a technology that can be developed overnight.

The Chinese authorities expect some concrete progress. Despite China's economic rise, it could not be comparable to the semiconductor industry in Japan, South Korea and especially Taiwan in general. Taiwan's chip manufacturing prowess is undoubtedly not a continuing wound to the Chinese government's collective ego.

I wouldn't expect to see competitive x86-derived clones anytime soon, but other chip architectures like the open source RISC-V are far less subject to foreign control. Millions of developers are in that talent pool and know what the future of Chinese chips holds.

Superpowers are actually not that different from schoolyard kids, and these 2 kids don't like sharing, even if substituting football for the semiconductor manufacturing industry is a bit complicated.