Executives of China’s Big Fund III are re-adjusting its purpose to address the most notorious gaps in the country’s semiconductor industry, namely lithography tools and electronic design automation (EDA) software. Previously, it was designed to support makers of fab tools and the semiconductor ecosystem in general. This recalibration comes as the U.S. intensifies efforts to restrict the access of China-based chip designers and chipmakers to tools and technologies vital for advanced semiconductors. The main purpose of the third installment of the National Integrated Circuit Industry Investment Fund, also called Big Fund III, was to strengthen local development and manufacturing of chipmaking equipment. This push has become urgent in recent years because companies like ASML, Applied Materials, KLA, Lam Research, and Tokyo Electron are now barred by export controls from selling their most advanced tools to Chinese entities without an export license. However, ‘fab tools’ is a really big product category as fabs use hundreds of different types of tools. Some of the China-made tools, such as etching or deposition machines, are already world-class. Others, such as lithography tools, are decades behind those produced by ASML. Apparently, managers of the Big Fund III want to focus on lithography equipment rather than on devices that are already good enough and which will evolve themselves going forward.

Full report : China will be using its $50 billion chip Big Fund III to back local companies and projects in semiconductors.