Beijing issues policy supporting chip industry

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Beijing's semiconductor industry is on the rise thanks to the close collaboration of domestic companies and organizations along the whole industry chain as well as the supportive policies of the Chinese capital.

Semiconductor makes the essential components of smartphones and high-resolution TV sets. China sees the industry as one of its strategic industries, while Beijing intends to lend it support as one of the city's 10 high-end industries. The country currently imports semiconductors worth US$200 billion every year.

Beijing issued a guiding document in December 2017 on the development of the semiconductor industry, calling for "whole industry chain coordinated development rooted in advanced manufacturing."

Long-term investment 

Shanghai-based Semiconductor Manufacturing International Corporation (SMIC), the largest chipmaker on the Chinese mainland, set up a plant in Beijing's Economic-Technological Development Area (or E-Town) as early as 2004. The company opened another factory in Beijing in 2012, which has grown into a key semiconductor manufacturing base in China. 

"Now I look back, that was a bold move," said Zhang Xin, general manager of the company's operations in northern China. He said the foundry was in the red back in 2012, but the company was encouraged by Beijing's supportive policies. 

Whole industry chain collaboration 

NAURA Technology Group, a semiconductor equipment maker, moved to E-Town partly because of the need to have closer collaboration with other enterprises in the industry, according to CEO Zhao Jinrong. 

The company sells some of its equipment to SMIC, which now has several hundred types of domestically made equipment (whereas it used to depend heavily on imported equipment). Engineers at SMIC would check on and give feedback to equipment makers like NAURA, the company said. 

Over time, E-Town has formed a complete semiconductor industry chain that includes supplying equipment, manufacturing, as well as design. 

Policy support

Beijing issued a guideline on the development of the semiconductor industry on Dec. 26, 2017, which has encouraged the city's numerous chip makers.

"As it involves a huge investment, the semiconductor industry across the world requires the guidance and support of government policies," commented an executive at a chip startup. The company received financing worth 500 million yuan (about US$77 million) last year mainly due to the capital city's favorable policy and promising industry outlook. 

Beijing aims at building an innovation base for semiconductor technology with global influence by 2020, according to the guiding document.  

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