Semiconductor industry: subsidies from China

China‘s government has provided more than $300 billion in subsidies to support the development of its semiconductor industry.

For starters, its «Made in China 2025» campaign aims for 70% semiconductor self-sufficiency by 2025.

According to a U.S. congressional analysis, China’s government outlays (approximately $322 billion to date) and its role as a global consumer electronics production hotspot create strong incentives for U.S. and foreign companies to develop semiconductor capabilities in China.

This estimate includes the initial announcement by the China Integrated Circuit Investment Industry Fund (CICIIF) to channel about $150 billion in state funds to support domestic industry, state-led overseas acquisitions, and the purchase of foreign semiconductor equipment.

It also includes the second fund China announced in October 2019 with an estimated capitalization of $29 billion and China’s plans announced in December 2022 to provide an additional $143 billion to support PRC fab development and related semiconductor manufacturing equipment costs.

Semiconductor industry

UK-based Arm Holdings refers that PRC semiconductor companies and OEMs may increasingly develop their own technology and use that technology in their devices, or use competitors’ technology in their devices.

Specifically, the PRC government’s 14th Five-Year Plan and related initiatives have identified the development of globally competitive Chinese enterprises in «core technologies,» such as semiconductors, as a key policy focus.

As part of a whole-of-government effort to encourage investment and the development of domestic semiconductor capabilities, the PRC government could encourage financing opportunities for Arm Holdings’ competitors in the PRC on favorable terms.

Also, according to this UK company, the Chinese government could influence major PRC customers to favor the adoption of Arm Holding’s PRC competitors’ intellectual property.

Based in Cambridge, England, Arm Holdings is a software and semiconductor design company.


Redacción Opportimes