Listen to the news

China is working on a plan worth more than 1 trillion yuan ($143.26 billion) to support the development of its own semiconductor manufacturing, three sources cited by Reuters said.

The world's second-largest economy is taking a major step toward building its own chip industry in an effort to counter U.S. moves aimed at slowing its technological progress, the agency noted.

Beijing plans to provide significant financial incentives over 5 years to boost the country's semiconductor manufacturing and research.

This will be done mainly through the granting of subsidies and granting the right to tax breaks, said the sources quoted by Reuters.

The implementation of this plan could begin as early as the first quarter of next year.

Most of the financial aid is expected to be used for subsidies for Chinese firms to buy domestic semiconductor manufacturing equipment.

These companies will be entitled to financial assistance in the amount of 20 percent of the value of the purchased equipment, the sources informed. 

China has criticized the US for its human rights sanctions against Beijing

Establishing a domestic chip industry is a priority for China, Reuters notes. 

News of China's plan comes after US President Joe Biden signed into law in August a law providing $52.7 billion in subsidies to support the country's semiconductor manufacturing and research development.

Also planned are $24 billion in tax credits for companies that make chips.

semiconductors