New China chip plan follows US approach

Author: EIS Release Date: Dec 29, 2022

China’s next tactic for advancing its chip industry is to subsidise semiconductor manufacturing equipment purchases by contributing 20% of the cost while providing tax concessions to device manufacturers which expand their production capacity and R&D activities, reports Reuters.

 

The biggest part of the $143 billion support package spread over five years is the 20% subsidy on equipment purchases which  copies the 25% subsidy for investment in fab offered under  the US Chips Act.

 

The China subsidy not only helps the device makers but also the all-important equipment makers which lag some 20 years behind their Western rivals in capability.7-micro-gan-6-in-wafer-with-high-voltage-power-transitors-1024x768

 

The new China support package is more precisely targeted than previous packages in that it gives money to firms with a track-record rather than to local government and entrepreneurs who frequently had little knowledge of the IC business.

 

The first beneficiaries under the new scheme could be chosen in Q1 2023.