Advertisement
Advertisement
Semiconductors
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more
Taiwan Semiconductor Manufacturing Co’s factory in Nanjing, capital of eastern Jiangsu province. The local government has unveiled a policy document to support the local chip industry. Photo: Agence France-Presse

Tech war: China’s Jiangsu province offers US$74 million a year to bolster vital semiconductor industry to counter US sanctions blow

  • Jiangsu will offer subsidies and financial support to cover research, equipment purchase, chip design, packaging and production
  • Local authorities have also promised cash grants to universities for semiconductor-related programmes

China’s eastern Jiangsu province has unveiled a policy package for the semiconductor industry, which includes at least 500 million yuan (US$74 million) a year in financial support over the next three years amid intensifying US trade sanctions.

While there is uncertainty over how Beijing plans to allocate funds to support domestic chip design and production, Jiangsu, a key chip production base, is promising a wide range of subsidies and cash awards to local chip businesses, according to the province’s development plan. The policy document was published on the province’s industry bureau website to solicit public feedback until January 16.

The subsidies and financial support will cover research, equipment purchase, chip design, packaging and production.

“[We should] vigorously develop advanced packaging … and chiplets,” according to the policy proposal. The document also highlighted the need to build domestic electronic design automation platforms and adopt self-developed testing equipment and intellectual property cores.

01:57

China condemns new US law aimed at boosting domestic semiconductor manufacturing

China condemns new US law aimed at boosting domestic semiconductor manufacturing

Advanced packaging, a technology which aggregates and interconnects components before traditional integrated circuit (IC) packaging, has been viewed by some experts and industry insiders as one of the solutions that China can focus on to forge its own path in advanced chip production, as the US moves undermine the country's ability to access advanced chips. Chiplet is one of the most popular concepts of advanced packaging.

The provincial capital of Nanjing and cities such as Wuxi and Suzhou are home to assemblers of global chip giants. The mainland factory of Taiwan Semiconductor Manufacturing Co, the world’s biggest and most advanced contract chip maker, is located in Nanjing, while South Korea’s SK Hynix operates a plant in Wuxi.

China’s chip heartland woos foreign investors as US pressure rises

Jiangsu has earmarked varying levels of financial support for semiconductor-related companies. For example, state-level technology innovation centres will receive at least 30 million yuan a year. A semiconductor company will be provided a subsidy of up to 20 million yuan to acquire another chip business, while IC design firms achieving 5 billion yuan of annual sales will get a one-time bonus of 5 million yuan.

The province will also provide tax holidays, exempting some new chip-related projects from taxes for 10 years, as part of the package.

The local government has even promised to give cash grants to universities for semiconductor-related programmes. A doctorate training programme is entitled to a special subsidy of 6 million yuan a year. And for every scholar engaged in postdoctoral research at certain local companies, the province will provide a grant of 300,000 yuan.

Other local governments like Shenzhen, Hefei, Hangzhou and Shanghai have also rolled out similar policies to develop their semiconductor industries to counter growing US export restrictions.

Shanghai, which currently accounts for a quarter of China’s semiconductor output, plans to build five industrial estates – some of which will focus on chips manufactured at mature process nodes – amid an anticipated huge demand from downstream sectors such as automobiles, a government official said in November.

Last October, Shenzhen’s economic planning agency published a similar proposal to provide support for the design of high-end, general purpose and special-purpose chips, the manufacture of silicon-based ICs and packaging of chiplets, among other parts along the semiconductor supply chain.

5