Encourage foreign investment in the domestic semiconductor industry? “Catalogue of Industries Encouraged for Foreign Investment” Revised and Released

On December 28, China’s National Development and Reform Commission and the Ministry of Commerce released the “Catalogue of Industries Encouraged for Foreign Investment (2020 Edition)” (hereinafter referred to as the “Catalogue”). world interest. The “Catalogue” encourages foreign investment to expand investment in China’s advanced manufacturing, producer services and other industries, and play an active role in the industrial supply chain. It is expected to be implemented on January 27, 2021.

According to the remarks made by the relevant person in charge of the Ministry of Commerce when answering reporters’ questions about the “Catalogue”, there are four main highlights in this revision: 1. Further increase the items to encourage foreign investment and expand the scope of encouragement; 2. Further encourage foreign investment in advanced manufacturing 3. It is to further encourage foreign investment to invest in modern service industries and improve the development quality of the service industry; 4. It is to further encourage foreign investment to invest in advantageous industries in the central and western regions and promote coordinated regional development.

It is reported that the revised “Catalogue” has a total of 1,235 entries, an increase of 127 compared with the 2019 version, an increase of 65 nationwide, and an increase of 62 in the central and western regions, an increase of more than 10%; the revision of 88 entries is mainly for the areas covered by the original entries. expanded.

For the semiconductor industry, the “Catalogue” further encourages foreign investment in advanced manufacturing and enhances the resilience of important industrial chains and supply chains. For example, in the fields of high-end manufacturing such as artificial intelligence and integrated circuits, the Catalogue has added or revised items such as manufacturing of integrated circuit packaging and testing equipment, and artificial intelligence-assisted medical equipment. The ones that are highly related to the semiconductor industry include: silicon single crystal manufacturing with a diameter of 8 inches and above, silicon wafer manufacturing with a diameter of 12 inches and above; integrated circuit design, large-scale digital integrated circuit manufacturing with a line width of 28 nm and below, 0.11 micron and The following analog, digital-analog integrated circuit manufacturing, mask manufacturing, MEMS and compound semiconductor integrated circuit manufacturing and BGA, PGA, CSP, MCM and other advanced packaging and testing; Manufacturing of computers, large-scale simulation systems, industrial control machines and controllers; R&D and manufacturing of new-mechanism computer systems such as quantum and brain-like systems; Etching machines, PVD, CVD, oxidation furnaces, cleaning machines, diffusion Development and manufacturing of furnaces and MFCs; manufacturing of integrated circuit packaging and testing equipment; manufacturing of computer digital signal processing systems and boards; manufacturing of graphic image recognition and processing systems; development and manufacturing of large-capacity optical and magnetic disk drives and their components; 100TB and above Storage system manufacturing, 8TB and above SSD solid state drive manufacturing and intelligent storage device manufacturing; Computer Aided Design (3D CAD), Electronic Design Automation (EDA), Auxiliary Testing (CAT), Auxiliary Manufacturing (CAM), Auxiliary Engineering (CAE) System and other computer application system manufacturing; software product development and production; electronic special material development and manufacturing (excluding optical fiber preform development and manufacturing); electronic special equipment, testing equipment, tooling and mold manufacturing; new electronic components manufacturing: chip element Devices, sensitive components and sensors, frequency control and selection components, hybrid integrated circuits, power electronic devices, optoelectronic devices, new electromechanical components, polymer solid capacitors, super capacitors, passive integrated components, high-density interconnect laminates, Single-layer, double-layer and multi-layer flexible boards, rigid-flex printed circuit boards and packaging substrates, high-density and high-fine circuit (line width/line spacing ≤ 0.05mm) flexible circuit boards, etc.; touch system (touch screen , touch components, etc.) manufacturing and assembly.

It can be seen that the scope involves multiple links in the semiconductor industry chain, many of which are areas where China’s industrial chain is weak. If relevant enterprises come to invest in production under the incentive of incentive policies, it is believed that the anxiety of lack of domestic industrial chain can be alleviated to a certain extent.

Of course, advanced manufacturing companies are not simply attracted by a policy that encourages investment. The reason behind the lack of relevant industrial links in China for a long time cannot be as simple as the lack of an incentive policy. It is related to factors such as industrial agglomeration, international relations, and intellectual property environment.

At the same time, foreign-funded enterprises obviously have considerable concerns about China’s industrial environment. This is reflected in the “New York Times”‘s recent report on China’s chip industry (see OFweek’s article yesterday “[Observation]”The New York Times” reports China’s chip fever, key words: investment bubbles and unfinished projects”). In the report, Randy Abrams, a technology analyst at Credit Suisse, said, “Due to concerns about intellectual property theft, some multinational chip manufacturers have begun to seriously consider cooperation with Chinese suppliers and partners… International companies have leaked intellectual property in China. Be more vigilant.”

Of course, with the incentive policies as the basis, at least it is a very important step in attracting relevant industries to invest and land.

The Ministry of Commerce also stated that the release of the “Catalogue” is conducive to better stabilizing foreign investment expectations and confidence, and is conducive to better stabilizing the fundamentals of foreign trade and foreign investment. Foreign investment in the fields listed in the “Catalogue”, if eligible, can enjoy the policy of exempting tariffs for imported equipment for self-use within the total investment; foreign-funded enterprises established in encouraged industries in the western region can reduce corporate income tax by 15%; for intensive land use Foreign investors are encouraged to invest in manufacturing projects, and the land can be given priority. When determining the land transfer floor price, it can be implemented at a rate not lower than 70% of the national minimum price for industrial land transfer according to the land level of the location.

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