Core Viewpoint - The semiconductor industry in China is experiencing a significant decline in market-driven capital investment, raising concerns about the future of the sector [1][2][3]. Group 1: Current Investment Trends - Market-driven capital has drastically reduced its investment in the semiconductor sector, with only about 25% of funds from traditional semiconductor investment funds currently allocated to this industry [1]. - State-owned capital is increasingly dominating semiconductor financing, with market-driven funds becoming less involved [1][2]. - State-owned enterprises are shifting their investment focus towards "relocation" projects rather than strategic industry development, indicating a more passive investment approach [1]. Group 2: Challenges Facing Market-driven Capital - The difficulty of listing and exiting semiconductor projects has increased, with stricter A-share listing reviews leading to a significant number of IPO withdrawals [3]. - The risks associated with semiconductor projects have escalated, making market-driven capital hesitant to invest without the ability to share risks through public offerings [3][4]. - The inability to proceed with mergers and acquisitions due to unresolved state-owned capital impairment issues is further discouraging market-driven capital from engaging in the sector [4]. Group 3: Importance of Market-driven Capital - Market-driven capital is essential for the ongoing development of the semiconductor industry, particularly for small-scale, high-risk, and cutting-edge projects [5]. - The international nature of the semiconductor industry requires the agility and risk tolerance that market-driven enterprises can provide, which state-owned capital lacks [5][6]. - The current oversupply of mature technologies and the shortage of advanced technologies necessitate the involvement of market-driven capital to fund high-risk innovation projects [5]. Group 4: Recommendations for Reviving Market-driven Capital - Improving capital market structures to allow for greater risk tolerance and acceptance of innovative projects is crucial for attracting market-driven capital back to the semiconductor sector [7][8]. - Facilitating state-owned capital's exit from underperforming projects is essential for enabling mergers and acquisitions, which are vital for industry consolidation and improvement [8]. - State-owned capital management should become more market-oriented, increasing investment in innovative projects to support the semiconductor industry's growth [8][9].