Corruption and arrests are sending shock waves through China's chipmaking industry

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"China’s chipmaking industry descended into chaos last week, with at least four top executives associated with a state-owned semiconductor fund arrested on corruption charges. ...

On July 30, China’s top anticorruption institution announced that Ding Wenwu, the chief executive of the China Integrated Circuit Industry Investment Fund, nicknamed the “Big Fund,” had been arrested ... Two weeks ago, Lu Jun, a former executive at the Big Fund’s management institution, was also taken into custody, along with two other fund managers, according to the Chinese news outlet Caixin.

Established in 2014, the Big Fund was intended to use government money to build a supply chain of chips made in China, thus reducing reliance on the US and its allies. ...

Eight years later, a total of $30 billion poured into the industry—with $20 billion more on the way—has yielded a complicated mix of successes and failures.  ...
But it wasn’t until 2019, when the US cut off Huawei from accessing chips made with US technologies, that the situation became urgent. The semiconductor industry traditionally relies on global supplies, and Chinese tech companies are dependent on overseas suppliers like Taiwan’s TSMC, Korea’s Samsung, or the Netherlands’ ASML. ..."

Corruption is sending shock waves through China's chipmaking industry | MIT Technology Review The arrests of several top semiconductor fund executives could force the government to rethink how it invests in the sector.