China Weighs Over $143B In Semiconductor Push To Beat US Embargo

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  • China earmarked over 1 trillion yuan ($143 billion) in support package for its semiconductor industry, in a significant step towards self-sufficiency in chips and to counter the U.S. embargo.
  • Beijing weighed introducing one of its most significant fiscal incentive packages over five years, mainly as subsidies and tax credits to bolster domestic semiconductor production and research activities, Reuters reports.
  • China looks to implement the plan as soon as the first quarter of next year.
  • Also Read: China Taps Alibaba, Tencent To Beat US Sanctions
  • Most of the financial assistance would subsidize the purchases of domestic semiconductor equipment by Chinese firms, mainly semiconductor fabrication plants or fabs.
  • Such companies would be entitled to a 20% subsidy on the cost of purchases.
  • Beijing looks to accelerate support for Chinese chip firms to build, expand or modernize domestic facilities for fabrication, assembly, packaging, and research and development.
  • The latest plan includes preferential tax policies for the country's semiconductor industry.
  • In August, U.S. President Joe Biden inked a landmark bill to provide $52.7 billion in grants for U.S. semiconductor production and research and tax credit for chip plants.
  • Alibaba Group Holding Limited BABA and start-up Biren Technology tweaked their most advanced chip designs to reduce processing speeds and bypass U.S.-imposed sanctions.
  • Photo by Tatiana Popova and rawf8 by Shuttterstock
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