Reuters:
Exclusive: China readying $143 billion package for its chip firms in face of U.S. curbs
HONG KONG, Dec 13 (Reuters) - China is working on a more than 1 trillion yuan ($143 billion) support package for its semiconductor industry, three sources said, in a major step towards self sufficiency in chips and to counter U.S. moves aimed at slowing its technological advances.
Beijing plans to roll out what will be one of its biggest fiscal incentive packages over five years, mainly as subsidies and tax credits to bolster semiconductor production and research activities at home, said the sources.
It signals, as analysts have expected, a more direct approach by China in shaping the future of an industry, which has become a geopolitical hot button due to soaring demand for chips and which Beijing regards as a cornerstone of its technological might.
The plan could be implemented as soon as the first quarter of next year, said two of the sources who declined to be named as they were not authorised to speak to media.
The majority of the financial assistance would be used to subsidise the purchases of domestic semiconductor equipment by Chinese firms, mainly semiconductor fabrication plants, or fabs, they said.
Such companies would be entitled to a 20% subsidy on the cost of purchases, the three sources said.
The fiscal support plan comes after the U.S. Commerce Department passed in October a sweeping set of regulations, which could bar research labs and commercial data centres' access to advanced AI chips, among other curbs.
The United States has also been lobbying some of its partners, including Japan and the Netherlands, to tighten exports to China of equipment used to make semiconductors. read more
And U.S. President Joe Biden in August signed a landmark bill to provide $52.7 billion in grants for U.S. semiconductor production and research as well as tax credit for chip plants estimated to be worth $24 billion.
With the incentive package, Beijing aims to step up support for Chinese chip firms to build, expand or modernise domestic facilities for fabrication, assembly, packaging, and research and development, the sources said.
Beijing's latest plan also includes preferential tax policies for the country's semiconductor industry, they said.
China's State Council Information Office did not immediately respond to a request for comment.
A researcher plants a semiconductor on an interface board during a research work to design and develop a semiconductor product at Tsinghua Unigroup research centre in Beijing, China, February 29, 2016. REUTERS/Kim Kyung-Hoon/File Photo
LIKELY BENEFICIARIES
The beneficiaries will be both state-owned and private enterprises in the industry, notably large semiconductor equipment firms like NAURA Technology Group (002371.SZ), Advanced Micro-Fabrication Equipment Inc China (688012.SS) and Kingsemi (688037.SS), the sources added.
Some Chinese chip shares in Hong Kong rose sharply after news of the package. Semiconductor Manufacturing International Corp (SMIC) (0981.HK) added more than 8%, sending its daily gain to nearly 10%. Hua Hong Semiconductor Ltd (1347.HK) closed up 17%, while mainland markets were closed when the report was published.
Achieving self-reliance in technology featured prominently in President Xi Jinping's full work report at the Communist Party Congress in October. The term 'technology' was referred to 40 times, up from 17 times in the report from the 2017 congress.
Xi's call for China to "win the battle" in core technologies could signal an overhaul in Beijing's approach to advancing its tech industry, with more state-led spending and intervention to counter U.S. pressures, analysts have said. read more
The U.S. sanctions published in October have caused major overseas-based chip manufacturing equipment companies to cease supplying key Chinese chipmakers, including Yangtze memory Technologies Co (YMTC) and SMIC, and makers of advanced artificial intelligence chips to cease supplying companies and laboratories.
The world's second-largest economy has launched a trade dispute at the World Trade Organization against the United States over its chip export control measures, China's commerce ministry said on Monday. read more
China has long lagged the rest of the world in the chip manufacturing equipment sector, which remains dominated by companies based in the United States, Japan, and the Netherlands.
A number of domestic firms have emerged in the past twenty years, but most remain behind their rivals in terms of ability to produce advanced chips.
NAURA's etching and thermal process equipment, for example, can only produce 28-nanometer and above chips, relatively mature technologies.
Shanghai Micro Electronics Equipment Group Co. Ltd (SMEE), China's only lithography company, can produce 90-nanometers chips, well behind that of the Netherlands' ASML, which is producing those as low as 3 nanometers.
($1 = 6.9796 Chinese yuan renminbi)
LIKELY BENEFICIARIES
The beneficiaries will be both state-owned and private enterprises in the industry, notably large semiconductor equipment firms like NAURA Technology Group (002371.SZ), Advanced Micro-Fabrication Equipment Inc China (688012.SS) and Kingsemi (688037.SS), the sources added.
Some Chinese chip shares in Hong Kong rose sharply after news of the package. Semiconductor Manufacturing International Corp (SMIC) (0981.HK) added more than 8%, sending its daily gain to nearly 10%. Hua Hong Semiconductor Ltd (1347.HK) closed up 17%, while mainland markets were closed when the report was published.
Achieving self-reliance in technology featured prominently in President Xi Jinping's full work report at the Communist Party Congress in October. The term 'technology' was referred to 40 times, up from 17 times in the report from the 2017 congress.
Xi's call for China to "win the battle" in core technologies could signal an overhaul in Beijing's approach to advancing its tech industry, with more state-led spending and intervention to counter U.S. pressures, analysts have said. read more
The U.S. sanctions published in October have caused major overseas-based chip manufacturing equipment companies to cease supplying key Chinese chipmakers, including Yangtze memory Technologies Co (YMTC) and SMIC, and makers of advanced artificial intelligence chips to cease supplying companies and laboratories.
The world's second-largest economy has launched a trade dispute at the World Trade Organization against the United States over its chip export control measures, China's commerce ministry said on Monday. read more
China has long lagged the rest of the world in the chip manufacturing equipment sector, which remains dominated by companies based in the United States, Japan, and the Netherlands.
A number of domestic firms have emerged in the past twenty years, but most remain behind their rivals in terms of ability to produce advanced chips.
NAURA's etching and thermal process equipment, for example, can only produce 28-nanometer and above chips, relatively mature technologies.
Shanghai Micro Electronics Equipment Group Co. Ltd (SMEE), China's only lithography company, can produce 90-nanometers chips, well behind that of the Netherlands' ASML, which is producing those as low as 3 nanometers.
($1 = 6.9796 Chinese yuan renminbi)
Much of Tiongkok's chip industry is still at the back end,. Assembly, Test and Burn In, similar to the technical level of Malaysia's chip industry.
ReplyDeleteTheir actual foundries are largely heavily subsidised and not competitive in the international market.
Well, pour in enough money, and you will eventually get what you wantm
Wakakaka…
DeleteAnother know nothing fart!
Since the foundation of NEW China under CPC, achieving self-reliance in technology has always been the topmost criteria of the China sopo advancement.
The homegrown atomic/hydrogen bombs, despite the BANS of US & SU technological helps.
The single-efforted Tiankong Spacelab despite the US-led technological isolation.
Two of the 5 topmost supercomputers of the world r Sunway TaihuLight & Tianhe-2A from China, built totally with China made chipsets!
Mmmm… have u heard about the Chinese quantum computers Zuchongchi 2.1 & 九章 despite all those media bulls from US quantum computing?
Currently China has the economic means & technological capabilities, together with the vast & complete industrial supply chains, to catch-up on computer chip manufacturing processes.
Along all the hyperbole of western media on chip technology, US is on par if not lacking behind on computer chip designs. US has NO chip foundries able to produce ANY 3, 5 & 7 mm CPU. Thus he has to hijack Taiwan's TSMC to Arizona.
But the long broken technological/manufacturing supply-chain inefficiency WOULD hamper this ambition.
Indeed, pour in enough money, US will eventually get what he wants. But long long into the CPU lapse time.