Tech war: Chinese local governments ramp up chip industry support as US piles on export restrictions
- Local governments like Shenzhen are playing catch-up with traditional semiconductor hubs such as Shanghai
- Analysts have warned that local authorities should be ‘cautious’ and take a long-term perspective when drafting policies to avoid wasting resources
China’s local governments are doubling down on cash incentives and policy support for home-grown semiconductor companies, as part of Beijing’s drive to achieve greater self-sufficiency in the chip sector amid heightened rivalry with the US.
Local governments like Shenzhen are playing catch-up with traditional semiconductor hubs such as Shanghai by unveiling a range of new measures and fresh cash to support semiconductor firms, in a broad move to bolster the country’s efforts to lessen dependence on foreign technology.
Some of the ambitious plans have emerged in cities previously not on China’s semiconductor radar screen. Lishui, a prefecture-level city in eastern Zhejiang province, has joined the charge by rolling out several measures to support the local chip industry. The city is run by the son of China’s former president, Hu Jintao.
A WeChat article published on the local government’s account last Friday noted that authorities are giving rewards to chip design enterprises that have designed their own copyrighted products.
Furthermore, if the annual revenue of a chip design enterprise’s main business exceeds 20 million (US$2.78 million), 100 million and 500 million yuan, the government will give them a subsidy of 300,000, 1 million and 5 million yuan, respectively.
01:30
China’s biggest drone maker DJI blacklisted by US defence department
For chip manufacturing and material firms with sales over 500 million, 1 billion, 2 billion and 5 billion yuan, the government rewards will be 5 million, 10 million, 20 million and 50 million yuan, respectively.