Chinese cities strengthen deployment for local development of chip and related industries

Chinese provinces and cities are making strategic moves to support the development of local chip companies and related industries. Experts highlighted the strengthened support, which will help China tackle “bottleneck” issues and boost local economic development.

The latest move came as Shanghai said it will grant up to 100 million yuan ($14.46 million) to support eligible projects related to integrated circuit equipment and materials and other high-end software projects to develop locally.

The aim is to attract more high-quality enterprises that are dedicated to the design, manufacturing, materials and other procedures involved in chip production, the municipality authorities said on Tuesday.

North China’s Tianjin announced on Monday plans to further strengthen the research for frontier artificial intelligence (AI) technologies and support for AI core chips developed by Chinese chipmaker Hygon Information Technology, while accelerating the digital transformation of related¬† small and medium-sized enterprises.

Beijing recently released an action plan from 2023 to 2025, which is open for public comments from Thursday to Tuesday. The plan aims to promote the development of the robotics industry while stressing enhanced development for specialized chips.

The chip industry and related sectors will form the cornerstone of China’s development of the digital economy, which will be the engine for the nation’s economic development, Xiang Ligang, a veteran technology analyst, told the Global Times on Tuesday.

Local governments should work together with the central government to advance the development of chips and related fields, responding to the suppression from some Western economies as well as tackling bottleneck issues, said Xiang.

The industry itself, as a new high-tech sector, can contribute to local economic development by forming industry clusters and attracting talent.

A number of cities and provinces are supporting the development of the compound semiconductor industry as demand for related fields including new-energy vehicles surges, reported on Tuesday.

For instance, Changsha, capital of Central China’s Hunan Province, will provide 50 million yuan worth of subsidies to support the semiconductor and IC industries, while South China’s Guangdong Province plans to set up a 30 billion yuan fund to invest in automotive chips, semiconductor materials devices and compound semiconductors.

Xiang said that moves by local governments show their foresight, as advancing research and development related to raw materials will also contribute to the nation’s overall industrial progress.

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