China announces measures to boost IC industry

The Chinese central authorities on Tuesday unveiled a program to promote the integrated circuit (IC) industry by setting up a state-level leading group and special investment fund.

The "National Guideline for the Development and Promotion of the IC Industry," published by the State Council, was meant to stimulate the dynamism and creativity of IC companies and accelerate the pace at which China's IC industry catches up with international leaders.

The sector's development should be focused on design and manufacturing, and great efforts should be made to boost the IC packaging and testing industry and make breakthroughs in key equipment and materials, it said.

A state-level "leading group" consisting of high officials will be set up to enhance top-level design and mobilize resources to boost the sector, according to the guideline.

Secondly, a special national industry investment fund will be put in place to provide a platform for big companies, financial institutions and social capital to support the development of the IC industry.

Thirdly, financial support will be increased for the industry in the form of providing new credit products and financial services, encouraging IC companies to go public, issuing financing tools and developing insurance products for the sector.

More efforts will be made to implement preferential tax policies for the industry, increase the application of secure and reliable software and hardware, encourage firms to set up IC technological research institutions, and boost international cooperation.

The IC industry, as the core of the information technology (IT) sector, is a strategic, fundamental and pioneering one to support economic and social development and safeguard national security, said the guideline.

Speeding up the development of the IC industry is also of great strategic significance to transform China's economic development pattern, safeguard national security and boost national competitiveness, it added.

The news should come as a boon to the country's IT sector, especially the chip-making industry, which has been lagging far behind the world heavyweights.

China relies heavily on imported ICs, which are among the country's top four import categories in terms of value, along with oil, iron ore and LCD panels.

As its reliance on foreign oil and iron ore cannot be reversed overnight, China has been working hard to promote the other two industries.

It has become less reliant on LCD panel imports in recent years, as its two leading makers of the panels, BOE and TCL, have been making strides in innovation. However, IC products continue to be imported in massive quantities.

With China's smartphone market booming, the country imported 232.2 billion U.S. dollars worth of ICs in 2013, up 34.6 percent year on year, according to customs authorities.

The figure was higher than the 219.6 billion U.S. dollars worth of imported oil for the year, making IC top the list of imports, resulting in a trade deficit of 144.1 billion U.S. dollars for the industry, which had been expanding for four years in a row.

The aim is to increase the sales revenue of China's IC industry to 350 billion yuan (about 56.2 billion U.S. dollars) by 2015, and to narrow the gap between Chinese and international levels in the sector by 2020, with its sales revenue growing 20 percent annually on average, according to the guideline.

By 2030, the main links in the IC industrial chain should reach the leading international level, it added.