China’s next tactic for advancing its chip industry is to subsidise semiconductor manufacturing equipment purchases by contributing 20% of the cost while providing tax concessions to device manufacturers which expand their production capacity and R&D activities.
The biggest part of the $143 billion support package spread over five years is the 20% subsidy on equipment purchases which copies the 25% subsidy for investment in fab offered under the US Chips Act.
The China subsidy not only helps the device makers but also the all-important equipment makers which lag some 20 years behind their Western rivals in capability.
The new China support package is more precisely targeted than previous packages in that it gives money to firms with a track-record rather than to local government and entrepreneurs who frequently had little knowledge of the IC business.
