As US-China relations are getting sour, Beijing is trying to loosen its dependence on Washington. Reportedly, China is planning to invest 1 trillion yuan ($143 billion) in the production of semiconductors and equipment for microcircuits.
The Chinese government needs to address the current challenges. Not long ago, the Biden administration limited exports of certain equipment and services to Chinese semiconductor companies. This move aims to slow the production of advanced node semiconductors in China, US officials said. This is why China does not spare money to outpace the US in the semiconductor race. The plan will be executed in the first quarter of 2023. The new aid package is likely to become the largest one in terms of financing domestic companies in five years. Beijing intends to beef up support for such companies as NAURA Technology Group, Advanced Micro-Fabrication Equipment, Kingsemi, etc.
The bulk of the allocated funds will be used to help Chinese companies buy domestic equipment for semiconductor manufacturing. The government intends to pay 20% of the cost of purchased equipment and machine tools. It will also support the creation of new and modernization of existing production facilities, development, and research in the field of chip production. The remaining funds will be allocated among industry companies in the form of subsidies and the other part will go to cover tax benefits.
