The Shanghai government doubled an investment fund supporting the domestic chip industry, with the latest funding round increasing the total to about CNY14.5 billion ($2 billion), East Money Finance reported.

State-backed companies in the city added CNY6.9 billion to the Shanghai Semiconductor Industry Investment Fund, supporting China’s aim to achieve self-sufficiency in chips.

Pudong Venture Capital joined as a new shareholder with a 10.6 per cent stake, while existing investors raised their investments. Shanghai Science & Technology Venture Capital Group is the largest investor with a 35 per cent share, with Shanghai Guosheng Group and Shanghai International Group each owning about an 18 per cent interest.

The first phase of the fund was set up in 2016 and has invested in the country’s largest contract chipmaker Semiconductor Manufacturing International Corp (SMIC) and Shanghai Huali Microelectronics.

In late May, China launched an ambitious CNY344 billion third chip fund backed by the Ministry of Finance and six state-owned banks to support the chip industry with loans over a ten-year period.

Facing widening US trade sanctions, China has stepped up investment in chip manufacturing, with SMIC boosting capex 77.7 per cent year-on-year to $2.2 billion in Q1.