China has established a third state-backed investment fund to support its semiconductor industry, taking its largest-ever investments in the field to around $145.5 billion (686.7 billion yuan) since 2014.

A filing with China’s government-run companies registry shows the latest cash injection totals $74 billion (344 billion yuan), Reuters news agency reports.

It is the largest of the three recent phases of the China Integrated Circuit Industry Investment Fund, also known as the Big Fund.

The first phase saw $29.4 billion (138.7 billion yuan) set aside in 2014, before the second phase saw $43.2 billion (204 billion yuan) pledged in 2019.

The latest investment comes after the US imposed export controls on its own chips in 2022, due to fears China could use them to enhance its military power or strengthen its artificial intelligence systems.

China’s finance ministry is reportedly the largest shareholder in the country’s third semiconductor funding round, with a 17 per cent stake.

China Development Bank Capital is the second-largest shareholder with a 10.5 per cent stake, while five other major Chinese banks also contributed, Reuters reports.

China’s Big Fund has delivered financing to the country’s two largest chip makers: Semiconductor Manufacturing International Corporation and Hua Hong Semiconductor.

Flash memory company Yangtze Memory Technologies and several smaller companies are also said to have received support.

Taiwan tensions

China’s President Xi Jinping is seeking self-sufficiency for the country in the semiconductor industry, which is dominated by nations such as Taiwan, South Korea and the US.

US President Joe Biden announced sharp rises to US tariffs on Chinese imports earlier in May, including electric vehicle batteries and computer chips.

"American workers can out-work and out-compete anyone as long as the competition is fair, but for too long it hasn't been fair," Biden said at the time.

"We're not going to let China flood our market."

Taiwan, a self-ruled island which is the largest producer of computer chips, has strengthened its relations with the US amid ongoing US-China tensions, with Washington and Taipei signing a trade agreement last year.

The first quarter of 2024 saw Taiwan export more to the US than it did to mainland China for the first time since comparable data became available in 2016, the Associated Press reported.

Xi has also continued to threaten to take over Taiwan, which China considers to be its own.

Biden's 2022 Chips and Science Act included $79 billion ($US52.7 billion) in support for the American semiconductor industry.

South Korea also announced a $28.7 billion (26 trillion won) funding package for its own semiconductor businesses last week.