On August 1, 2026, the National Integrated Circuit Industry Investment Fund Phase III (referred to as "National Fund Phase III") announced its full launch, with the first batch of investment scale exceeding 300 billion RMB, focusing on key areas such as advanced process chip manufacturing, semiconductor equipment, materials, and AI computing power chips. This is another large-scale national capital layout in the semiconductor field in China after the first and second phases of the National Fund. As soon as the news came out, A-share and Hong Kong stock semiconductor sectors rose accordingly, and chip-related stocks listed on SGX were also boosted. This heavyweight policy signal once again pushed the proposition of "why invest in chips" to the spotlight.
National Fund Phase III: comprehensive upgrade in scale and direction
According to public information, the National Fund Phase III completed the first batch of project signings on July 31, 2026, with the first batch of funds exceeding 300 billion RMB, and the total scale is expected to exceed 500 billion RMB. Compared with the previous two phases, this investment is more focused on "bottleneck" links, especially advanced logic chips, 3D NAND storage chips, semiconductor front-end equipment (such as lithography machines, etching machines), and AI acceleration chips. Industry analysts pointed out that the investment logic of the National Fund Phase III has shifted from "point breakthrough" to "industry chain synergy", which will drive more than 1 trillion yuan of supporting investment in the upstream and downstream.
Advanced processes and AI chips become the core
Against the background of explosive growth in global AI computing power demand, the National Fund Phase III clearly lists AI chips as a key investment direction. This not only includes computing chips such as GPUs and NPUs, but also high-bandwidth memory (HBM) and advanced packaging technology. At the same time, the domesticization process of advanced processes of 14nm and below is expected to accelerate. Many brokerage research reports believe that the implementation of the National Fund Phase III will directly benefit domestic semiconductor equipment, materials and EDA tool companies, and enhance market confidence in the long-term growth of domestic chips.
Why invest in chips? The three core logics remain unchanged
In the face of global semiconductor cycle fluctuations and geopolitical frictions, the logic of investing in the chip industry is still clear, or even more solid. The following analyzes from three dimensions.
1. Domestic substitution: from "optional" to "necessary"
In recent years, the United States, the Netherlands, Japan and other countries have continued to tighten export controls on semiconductors to China, especially in high-end chips and manufacturing equipment. This external pressure has forced the domestic semiconductor industry chain to accelerate self-reliance. According to industry statistics, China's chip self-sufficiency rate is currently about 25%, and it still highly depends on imports in high-end fields such as automotive electronics and industrial control. The investment of the National Fund Phase III will directly promote the progress of domestic equipment, material verification and import, shortening the substitution cycle. For investors, domestic substitution is not a short-term hot spot, but a deterministic trend for the next five to ten years.
2. Policy support: sustainability of national strategic level
The semiconductor industry is a typical high-input, long-cycle, high-barrier industry that requires long-term capital and policy support. Since the establishment of the first phase of the National Fund in 2014, the country has invested hundreds of billions of yuan cumulatively, and has also supported multiple policies such as tax incentives and R&D subsidies. The "14th Five-Year Plan" digital economy plan released in 2026 also emphasizes "breaking through key core technologies in integrated circuits". The continuity of policy support provides a stable development environment for the semiconductor industry and reduces investment uncertainty.
3. Long-term demand: driven by AI, new energy vehicles and IoT
The current global semiconductor market is shifting from consumer electronics-driven to AI and new energy vehicle-driven. IDC predicts that the global AI chip market size will exceed 150 billion US dollars in 2026, the chip usage per new energy vehicle will exceed 3,000, which is more than 3 times that of traditional fuel vehicles. In addition, 5G/6G, IoT, and industrial automation are also creating massive new demands. The long-term growth of demand provides broad space for the growth of the chip industry.
Investment opportunities in SGX (Singapore Stock Exchange) chip stocks
As an important financial center and semiconductor industry hub in Asia, Singapore's stock exchange gathers many companies in the chip industry chain, including chip design, wafer foundry, and equipment distribution. SGX chip stocks not only benefit from the global semiconductor recovery, but also gain additional dividends from the reshaping of the Southeast Asian semiconductor supply chain. With the launch of the National Fund Phase III and the global AI computing power competition, SGX chip stocks are expected to experience both valuation and performance growth. Investors can share the industry growth dividend through SGX-listed semiconductor ETFs or individual stocks.
Risk warning and outlook
Although the logic of investing in chips is clear, investors still need to pay attention to risks. Global semiconductor cycle fluctuations, uncertainty in technological iteration, geopolitical conflicts, and high industry valuation may all bring callback pressure. It is recommended to adopt a long-term fixed investment or diversified allocation method, and focus on companies with core technical barriers and stable cash flow.
Overall, the full launch of the National Fund Phase III once again confirms the high growth of the chip industry driven by both national strategy and market demand. For ordinary investors, understanding "why invest in chips" is more important than betting on a single stock. The huge space for domestic substitution, the certainty of policy support, and the explosion of emerging demands such as AI together constitute the value base for long-term chip investment. In today's 2026, the logic of investing in chips is clearer than ever.
