According to a report from Mobile World Live, a survey of US venture capital found that the flow of funds to the Chinese semiconductor industry is increasing because the Chinese government’s support reduces the risk of such investments.

Data compiled by Rhodium Consulting for the Wall Street Journal show that from 2017 to 2020, US venture capital firms, chip giants, and other private investors participated in 58 investment transactions in China’s semiconductor industry, double of which in four years ago.

This research focuses on U.S. registered entities that make equity investments in China, excluding the investment amount.

Strategic investors such as Intel Capital, together with financial companies, appear on the list of investing in China’s chip industry.

In addition, the Wall Street Journal found that since the beginning of 2020, Silicon Valley venture capital firm Sequoia Capital, American Lightspeed, Jingwei Venture Capital and Red Dot Venture Capital’s related companies in China have made no less than 67 investments in the Chinese chip industry.

The Democratic Senator Bob Casey of Pennsylvania and the Republican Senator John Cornyn of Texas proposed legislation requiring the government to supervise foreign investment, but they were opposed by the U.S. Chamber of Commerce and the US-China Business Council.

As US policies have made it more difficult for some Chinese companies to obtain chips, the Chinese government has funded domestic start-ups to try to fill this gap. Analysts told the Wall Street Journal that government support has made these startups more attractive for investment.

According to the data of the American Semiconductor Industry Association (SIA), there will be more than 22,800 newly established semiconductor companies in China in 2020, an increase of 195% over 2019.