China preparing $143 billion fiscal package aimed at self-sufficiency in chip production

As the United States has moved to incentivize chip and semiconductor fabrication and development in the country, it has also introduced trade regulations which have affected China. Now, the latter is introducing its own national incentives to grow self-sufficiency and counter said US regulations. China’s government is allegedly preparing a 1 trillian yuan (about $143 billion) pack for its semiconductor industry aimed at boosting the nation’s technological advances and self-sufficiency in the tech industry.

China’s alleged plans to launch this $143 billion package were shared via several sources close to the packages development, as reported by Reuters. If the package is confirmed, it’s said to be rolling out over the course of the following five years. It will go to fund subsidies and tax credits related to development and expansion of semiconductor production and research activities. This would also be one of the largest fiscal incentive packages China has ever launched, aimed at solidifying the country as one of the world’s foremost chip producers.

China's fiscal incentive package isn't only directed towards new semiconductor production, but also expansion for groups like TSMC that are already leaders within the tech industry within the nation.
Source: Image via Taiwan Semiconductor Manufacturing Co.

China’s alleged plans for this fiscal incentive package come both as an effort to ensure its dominance in the semiconductor and tech industry, but also in response to recent activity by the US government to reduce reliance on Chinese chips. Earlier this year, the United States passed the CHIPS Act as its own incentive package aimed at pumping money into chip fabrication and technology development in the US. Groups like Intel, Micron, and even Taiwan Semiconductor have moved to take advantage of the CHIPS Act. However, US regulations alongside the CHIPS Act have also put pressure on international trade with China.

With China seemingly looking to take back some measure of control in the tech industry, it will be interesting to see how things play out if the $143 billion semiconductor incentive package launches. Stay tuned as we continue to monitor this story for further updates.