China amps up public subsidies for chip-making

This came from Reuters and possibly “old news” by the time it gets online on this blog. All my posts are scheduled for the future. However, as of December 2022, this is critical.

The Chinese semiconductor industry is on the brink of declaring bankruptcy. These are further accentuated by the issues around US sanctions. As again, geopolitics isn’t the focus here, but I have studied the supply chains to understand risks better. Healthcare requires an uninterrupted service. If you don’t understand how your hardware is sourced (and shipped), and attendant hostage risks to disruption, then there is trouble.

Therefore, the ensuing fiscal support to these industries assumes importance.

Exclusive: China readying $143 billion package for its chip firms in face of U.S. curbs | Reuters

Beijing plans to roll out what will be one of its biggest fiscal incentive packages, allocated over five years, mainly as subsidies and tax credits to bolster semiconductor production and research activities at home, said the sources. 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, they said.

These come at the heels of what US has done:

And U.S. President Joe Biden in August signed a landmark 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.

India has announced its plans (and firmed up partnerships) with other players. I am closely watching that space.

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