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China exempts chip makers from taxes

As you know, one of the most effective mechanisms for stimulating production is tax exemption. To help semiconductor chip makers expand production, the Chinese government introduced tax incentives. Industry officials are encouraging this innovation as they believe it will provide an incentive for local companies to expand production to saturate the giant consumer electronics chip market.

Under the terms of the program, any semiconductor manufacturer that invests more than $ 8 billion. yuan (approximately 263 million. Doll.) or uses a technical process with rates less than 0.25 microns, will be able to reduce their tax deductions by 15%. Companies that invest in long-term production projects at rates less than 0.25 microns are completely tax-exempt for the first five years, and for five years after they start making profits, they will pay taxes at 50% of the normal rate.

The source names some manufacturers who are expected to take advantage of the benefits provided. These are Hua Hong NEC (HHNEC), Grace Semiconductor Manufacturing Corporation (GSMC) and Semiconductor Manufacturing International Corporation (SMIC) aggressively ramping up production using 300mm wafers.

How the decision of the Chinese government will affect the market for semiconductor chips and consumer electronics has not yet been reported. One thing can be assumed with a high degree of certainty – there will be much more microcircuits and finished products from them.

Source: DigiTimes

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