Chinese city of Shenzhen offers free money to boost chip industry

Throwing cash at industry to keep chip well from running dry as US sanctions continue to bite

The Chinese city of Shenzhen has proposed a plan to lure semiconductor makers, offering subsidies to the tune of 20 percent of a qualifying applicant's annual investment, up to a maximum of $1.4 million a year.

Once the companies have arrived, the proposal would see the Chinese city assisting in things like obtaining finance and making use of government service and boards.

But the Chinese coastal metropolis, which sits between Hong Kong and the rest of the mainland, doesn't only want to bring home the making of the product itself, it's looking to bring in talent as well. A cool $700,000 was promised to companies looking to bring in "eligible talents" alongside other measures to bring overseas expertise back to China.

The city has a laundry list of achievements it hopes to make through the program: 21 to be exact.

That list includes finding breakthroughs in core products, improving manufacturing capabilities, catching up with high-end packaging and testing, accelerating compound semiconductor and electronic design automation technology, growing import and export trade, and more.

The proposal from the Shenzhen Municipal Development and Reform Commission specifies, through another lengthy list, which technologies qualify for the free cold hard cash:

This measure focuses on supporting:

1. The design of high-end general-purpose chips, special chips and core chips, compound semiconductor chips and other chips;
2. Silicon-based integrated circuit manufacturing;
3. Semiconductor manufacturing of gallium nitride, silicon carbide and other compounds;
4. High-end electronic components manufacturing;
5. Wafer-level packaging, three-dimensional packaging, Chiplet (mandrite) and other advanced packaging and testing technologies;
6. Development and application of EDA tools and key IP core technologies;
7. Lithography, etching, ion implantation, deposition, testing equipment and other advanced equipment and key parts production;
8. As well as the research and development and commercialization of core semiconductor materials.

Open-sourced RISC-V architecture was also namechecked as a core chip product the commission would like to see breakthrough and is eligible for that 20 percent annual funding or 10 million CNY ($1.4 million).

Its inclusion provides a hint that China may see the immature tech as a way forward during a time of restrictive US sanctions.

Last week, the US Commerce Department added 31 Chinese firms to a list that effectively bars them from importing American chip and manufacturing tools. The US Bureau of Industry also recently revised rules on exporting semiconductor electronic design software and test equipment.

Last month, the US Commerce Department passed a requirement for US companies that make chip equipment to receive explicit licensing before exporting to China.

The Shenzhen Municipal Development and Reform Commission encourages "relevant units and people from all walks of life" to give feedback on the proposal before November 8, 2022. ®