Analysis of China's revised domestic semiconductor industry goals

Facing a funding shortage for local IC manufacturers, the China State Council published the "National Integrated Circuit Industry Development Guidelines" in June 2014 to strengthen government support for China's semiconductor industry, while stating the short-, mid-, and long-term goals for the related industry supply chains through 2030.

In addition to continuing the tax benefits mentioned in the State Council Document 4 (2011) document for IC design houses and foundries, the tax benefits have expanded to testing firms. This means the testing firms also enjoy benefits on corporate income, value-added, and operation taxes.

The central government also plans to set up a national industry investment fund of CNY120 billion (US$19.3 billion). The fund will mainly focus on investing the construction of advanced process capacity, semiconductor firm reorganization, and mergers.

Digitimes Research believes through the investment fund support, China will increase its capabilities for advanced processes on 12-inch wafers. In addition, there will be more China-based semiconductor firms merging and more acquisitions of international firms by China-based firms. This Digitimes Special Report examines how the revised Central Government guidelines and various local government policy implementations will affect China's the semiconductor manufacturing, IC design, packaging & testing and materials industry.