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China Spends Billions on Chips

By NAM News Room

China is pouring $143 billion into its semiconductor industry, in response to efforts by the U.S. and other countries to restrict Chinese access to key technologies, according to Reuters (subscription).

Why it’s happening: The program comes on the heels of U.S. efforts to reduce China’s access to U.S. technology, including the August passage of the CHIPS and Science Act as well as October regulations from the U.S. Commerce Department to control Chinese access to semiconductor technologies.

  • The U.S. has also been encouraging trading partners to reduce exports of semiconductor equipment to China, conducting talks with Japan and the Netherlands that are reportedly making progress

What’s the plan? “Achieving self-reliance in technology featured prominently in President Xi Jinping’s full work report at the Communist Party Congress in October,” according to Reuters.

  • The critical policies within the new plan include funding to build more chip firms and expand facilities that can support assembly, packaging and research and development. The initiative also includes tax policies meant to help the semiconductor industry. 
  • Sources suggest that implementation might start early next year.
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