China is preparing to pour up to 500 billion yuan ($70 billion) into its semiconductor industry as the country accelerates efforts to achieve technological self-sufficiency in chips.
Chinese authorities are reviewing a subsidy and financial support package ranging from 200 billion yuan ($28 billion) to 500 billion yuan, Bloomberg reported Sunday, citing people familiar with the matter. The specific scale of support and target companies have not been finalized.
Even the minimum scale of this support package approaches the amount allocated under the U.S. CHIPS Act, Bloomberg noted. The move demonstrates Beijing's determination to reduce dependence on foreign chipmakers such as Nvidia, analysts said.
The support comes even as the Trump administration approved exports of Nvidia's H200 chips to China, signaling that Beijing intends to continue backing domestic companies including Huawei and Cambricon. If realized at maximum scale, this would become the largest state-led semiconductor support program in history.
Notably, the new funding would operate separately from existing government investment plans, including the third phase of the Big Fund (National Integrated Circuit Industry Investment Fund), which has been set at 344 billion yuan.
Chinese President Xi Jinping has called for mobilizing national resources to achieve semiconductor self-sufficiency, as export restrictions dating back to the first Trump administration have created uncertainty around access to advanced U.S. chip technology.
Although the United States recently approved Nvidia's H200 exports to China, Beijing is expected to tighten approval procedures for the H200 and ban government-affiliated agencies from purchasing the chips.
The private sector is also accelerating advanced chip development. Huawei has launched its AI server system "CloudMatrix 384" to challenge Nvidia, while Baidu and Alibaba are pushing chip development through large-scale computing clusters that bundle multiple self-developed chips together.
Chinese authorities are actively encouraging the use of domestically produced semiconductors. Beijing has issued directives to limit Nvidia chip usage while announcing policies offering electricity discounts to data centers that utilize domestic chips.