Mainland's Semiconductor Industry Policy Magnetic Attraction Effect Expands

Sales in the mainland semiconductor industry will continue to grow by more than 20% in 2018, mainly due to the fourth silicon upgrade highlighting major innovations in artificial intelligence, automotive electronics, industry, the Internet of Things, 5G, high-performance computing and so on, which will continue to be the core driving force for the growth of the mainland semiconductor industry; let alone the supply of new components for the iPhone in the second half of the year Businessmen have begun to pull goods, optimistic low-cost version of the main shipment drive industry chain companies operating performance is better than the first half, and the mainland's flagship new aircraft have been listed, but also synchronously pull up the mainland's semiconductor industry chain company performance.

In addition, in the current tense situation of Sino-US trade war, semiconductor as the core technology, the follow-up resource allocation continues to increase, so the second half of 2018 is expected to enter the mainland semiconductor industry policy-intensive promotion period, and since 2018 local governments have also offered measures to support the semiconductor industry, including the May 2018 building. More than 500 million yuan (RMB, the same below) of Xiamen Joint Integrated Circuit Industry Equity Investment Fund was set up jointly by several investment institutions. In June 2018, Zhejiang Province established a small town of China's core industry. The key R&D projects were discussed on a case-by-case basis, with a maximum funding support of 100 million yuan, which was issued by Nanjing in July 2018. The implementation plan of building IC industry landmark is expected to reach 150 billion yuan by 2025, and a 20 billion dollar semiconductor industry investment fund will be set up.

It is worth mentioning that in the past, American semiconductor companies divested low-level semiconductor manufacturing to Asia, leaving behind their own core design centers and high-level process technology. Meanwhile, the mainland government has invested a lot of money to develop the semiconductor industry since June 2014. However, since 2017, the U.S. government has aroused vigilance. China's determination and momentum make the United States very worried about the country's gradual expansion to high-end industries, worried that the advantages of the United States semiconductor will no longer be, so the Sino-US trade war in 2018 will be extended to the field of semiconductor, meaning that the Sino-US political game will also play an important role in the development of the mainland semiconductor industry in 2018; however, the second in 2018 The QZTE incident clearly reflects the high dependence of the mainland on the outside world in the field of chip manufacturing. Obviously, the shortage of core technology in the mainland semiconductor industry has not changed, and it is still at the middle and low end of the global industrial chain and value chain as a whole. Domestic substitution will continue to be supported by national policies and funds.

Liu Peizhen (Associate Research Fellow of the Taiwan Economic Research Institute)