Economic Observer Shen Yiran/Text Will China’s semiconductors receive large-scale government support policies in 2023? The prediction is: yes.
The global semiconductor industry will fall into a complex situation in 2022. On the one hand, various countries have successively promulgated industrial policies to guide the return of chip and manufacturing industries, and the cracks in globalization have not eased but have further widened; on the other hand, although China's local semiconductors have maintained a rising momentum of development, they also face many unfavorable external factors: US restrictions and cyclical lows. In this case, local semiconductor companies need continued strong support from the state.
Semiconductors are strategic, basic and leading industries for the development of modern economic society, and are also the basic support for traditional industries to move toward digitalization. This is also a typical industry of global cooperation. In an era of stable international relations, countries use their own comparative advantages to participate in the division of labor in semiconductors. Nowadays, countries use industrial policies to support the development of local semiconductors and promote structural changes. This is no longer a completely competitive market.
In August 2022, the United States officially signed the chip bill with a total value of US$280 billion, and plans to provide a total of US$52.7 billion in government subsidies for semiconductors in the next five years.
Previously, the European Commission announced the "Chip Act" that has attracted much attention from the outside world, and plans to significantly increase the EU's share of global chip production. According to the bill, the EU will invest more than 43 billion euros in public and private funds to support chip production, pilot projects and start-ups. Among them, 11 billion euros will be used to strengthen existing research, development and innovation to ensure the deployment of advanced semiconductor tools and pilot production lines for prototyping, testing, etc.
In terms of the industry, the semiconductor industry chain is long and intensive in technology, talent, and capital. The "invisible hand" alone is not enough to support it. Nowadays, the reorganization of the global layout is inevitable. In a turbulent situation, China has the world's largest semiconductor market and needs to support and guide the development of local industries.
China has started to support semiconductors very early. In November 2009, the country established major science and technology projects for core electronic components, high-end general chips and basic software products to support technologies including semiconductors in the form of scientific research funds. In 2014, integrated circuit major fund supported enterprises in all aspects of the semiconductor industry chain in the form of equity investment . Local governments have also successively launched policies to support local enterprises.
In October 2022, some wafer manufacturing plants and advanced semiconductor-related companies in China fell into the scope of new U.S. regulations and will no longer be able to import U.S.-related advanced equipment. However, local semiconductor equipment materials have not yet developed and grown and cannot support local manufacturing companies. Manufacturing is the foundation of an industry, and semiconductor equipment and materials are an extremely deep link. The development of local companies is weak and may enter a cycle low in 2023 (due to the conductivity of the industrial chain). Next, vigorously developing local equipment and materials companies is the key to strengthening local manufacturing capabilities.
