China may offer $143 bn support package for its semiconductor industry

China is planning to offer more than 1 trillion yuan ($143 billion) support package for its semiconductor industry, Reuters news report said.
BE SemiconductorBeijing plans to roll out its biggest fiscal incentive packages over five years, mainly as subsidies and tax credits to bolster semiconductor production and research activities at home.

The majority of the financial assistance would be used to subsidise the purchases of domestic semiconductor equipment by Chinese firms, mainly semiconductor fabrication plants, or fabs.

Such companies would be entitled to a 20 percent subsidy on the cost of purchases.

The support plan comes after the U.S. Commerce Department passed in October a set of regulations, which could bar research labs and commercial data centres’ access to advanced AI chips, among other curbs.

United States President Joe Biden in August signed a bill to provide $52.7 billion in grants for U.S. semiconductor production and research as well as tax credit for chip plants estimated to be worth $24 billion.

Beijing aims to step up support for Chinese chip firms to build, expand or modernise domestic facilities for fabrication, assembly, packaging, and research and development.

Semiconductor equipment firms like NAURA Technology Group, Advanced Micro-Fabrication Equipment China and Kingsemi will benefit.