Beijing push to spur rapid growth in chip industry
More mergers and acquisitions and joint ventures on the cards after government pours huge amounts of funds into sector
The mainland's semiconductor industry is poised for rapid expansion over the next few years on the back of a new government policy that is infusing vast amounts of capital into the market to spur consolidation.
"Many have happened, but we expect more mergers and acquisitions, joint ventures and partnerships going forward to accelerate industry growth," Bernstein Research senior analyst Mark Li said in a report based on a recent survey of 16 companies in the mainland's semiconductor supply chain.
Introduced by the State Council in June, the new guidelines to promote the semiconductor industry's development outlined the central government's targets and long-term support for designers, developers and manufacturers of integrated circuits.
Its aggressive target is for the industry to record a 20 per cent compound annual growth rate by 2020.
The high-level framework paved the way for the creation of the National IC Industry Investment Fund in September, with 120 billion yuan (HK$150 million) as initial financing.
The fund, which is overseen by Huaxin Investment Management, was set up primarily to help domestic players expand manufacturing capacity, boost research and development, and pursue market restructuring and consolidation.