China re-shapes its silicon industry to boost production
- Reference: 1596695557
- News link: https://www.theregister.co.uk/2020/08/06/china_new_chip_industry_policy/
- Source link:
The new policy, unveiled by the State Council on Tuesday and charmingly named "Several Policies to Promote the High-quality Development of the Integrated Circuit Industry and Software Industry in the New Era", sets out [1]40 rules to support China's domestic semiconductor industry [中文] through a combination of tax concessions that become more lucrative for companies capable of working on smaller die size.
Semiconductor Manufacturing International Corporation and Shanghai-based Huahong, China's only sub-28nm manufacturers, will be exempted from all corporate taxes for 10 years. Other local chip-makers producing 28nm to 65nm product will have their corporate taxes halved for five years.
Other players in the semiconductor industry, including designers, outsourced semiconductor assembly and test providers (OSATS), and software developers will also receive more limited corporate tax exemptions.
The revised policy is more both more generous and more focused than previous efforts. It only applies to local companies who have been operating for 15 years or more, meaning that it is geared towards supporting established companies rather than speculating on startups.
The policy also exempts chip-makers from most import duties and allows them to pay import value-added tax in installments. Although China accounts for by far the world's most chip fabs, it is still heavily reliant on imported components to run them. Last year, it imported $305.9bn worth of integrated circuit and microassembly equipment. That sum accounted for around 15 per cent of Chinese imports of all goods across all sectors.
China hopes these policies will help it achieve a goal of producing 70 per cent of its semiconductor needs with home-baked products by 2025 as part of its “Made in China 2025” policy. To date it's [2]missed its targets according to analysts at IC Insights. They doubt that China will reach those levels even by 2030, noting that locally made chips only made up about six per cent of the country's consumption in 2019.
The support also extends beyond tax cuts. The government promises to also help foster domestic talent, support local chip-makers in applying for IP rights and oversee their enforcement, and encourage “international cooperation” by asking multinationals to build research centres and universities in China. ®
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[1] http://www.gov.cn/zhengce/content/2020-08/04/content_5532370.htm#
[2] https://www.theregister.com/2020/06/09/china_semiconductor_manufacturing_targets_missed/
[3] https://whitepapers.theregister.com/
Re: Ya know that silicone superiority y'all thought you had...
Silicone is the stuff you use to waterproof around your bath or shower or make bigger boobies with, silicon on the other hand is the element used in electronics.
Thinking about it though, the highly synthetic nature of silicone means you were probably right.
Cue tantrums of 'unfair competition from Chinese State subsidised companies', from the usual quarters.
Backing China into a corner and forcing/encouraging it to become more self sufficient will make it more difficult to compete with them and will make recources like rare earths more more expensive and harder to obtain simply because they are being used in China.
I doubt there will be too many tantrums
I think Globalfoundries got $1bn from New York State, plus tax breaks, to set up there. Bezos ran a competition to see how much cities would pay him to put Amazon's HQ in it. The US has a long tradition of paying big companies to set up in various locations. Tax breaks for strategically important industries (aerospace, defence, semicondutors) are also common.
Tantrums
The U.S. might give tax breaks, or even provide federal funds, in a similar way, but that doesn't mean that this won't be spun as "unfair advantages" for Chinese companies.
Slip in a couple of references to "commies" and "socialists" and Trump has all the justification he needs for a trade war...
"All we want is a level playing field", etc.
Smaller die sizes?
More likely smaller feature sizes. They want to get more transistors on a given sized chip, not make smaller chips.
weeell
Rare earths - not so much - they tried to corner the market a few years ago, and got egg on their faces - see previous El Reg seminars and articles. Mostly by not properly understanding how international rare earth extraction works.
This subsidization has nothing to do with the West leaning on China - its not a reactions, its part of a plan. This was in play long before that fracas started - they have been importing high tech fabrication systems for years - and stealing know how when they can. This is part of a play for the worldwide semiconductor industry - and the govt subsidies are part of that long-play.
International companies would be crazy to invest in training, manufacturing and R&D there - except they will continue to do it for the short term massive markets (much easier and often only possible to sell tech in China if a thing is made in China). That is also part of the China strategy. These guys are playing a long, long game - these subsidies last for 10 years and represent a massive and long term subsidization of Chinese manufacturing.
They won on steel, now they are moving on. last year, they manufactured 10 times more steel their next rival (india), and more than the next 20 countries combined.
Re: weeell
They won on steel, now they are moving on. last year, they manufactured 10 times more steel their next rival (india), and more than the next 20 countries combined.
Why shouldn't they? They also use the most steel worldwide - they produce ~1000m tons of steel and export around 60m tons of steel.
Ya know that silicone superiority y'all thought you had...
Oh dear.
Byebye silicone valley.