China is putting together an aid package of more than 1 trillion yuan ($143 billion) for its semiconductor industry, according to three sources, in a major step toward self-sufficiency in chips and to counter US measures aimed at slowing its advances. technological.
Beijing plans to roll out one of its biggest tax incentive packages over five years, mainly in the form of subsidies and tax credits to boost semiconductor production and research activities in the country, the sources said.
The plan, which according to sources could be applied as early as the first quarter of next year, has not been previously communicated.
Most of the financial aid would be used to subsidize purchases of domestic semiconductor equipment by Chinese companies, mainly semiconductor manufacturing plants, two of the sources said.
These companies would be entitled to a subsidy of 20% of the cost of purchases, according to the three sources.
China makes the development of an independent chip industry a political priority.
The fiscal support plan comes after US President Joe Biden signed a landmark bill in August to provide $52.7 billion in subsidies to US semiconductor production and research, as well as tax credits for chip factories. for an estimated value of 24,000 million dollars.
With the incentive package, Beijing aims to increase support for Chinese chip companies to build, expand or upgrade their domestic manufacturing, assembly, packaging, and research and development facilities, according to the sources.
Beijing’s latest plan also includes preferential tax policies for the country’s semiconductor industry, they added.
The sources declined to be cited because they were not authorized to speak to the media.
The State Council Information Office did not immediately respond to a request for comment.