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.
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.
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 authorized to speak to media.
The majority of the financial assistance would be used to subsidize 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 centers' access to advanced AI chips, among other curbs.
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 a tax credit for chip plants estimated to be worth $24 billion.
With the incentive package, Beijing aims to step up support for Chinese chips firms to build, expand or modernize domestic facilities for fabrication, assembly, packaging, and research and development, the sources said.
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