The Chinese government is now in the midst of preparing a subsidizing program which will specifically target the IC companies in China. The government will invest up to RMB$100 billion to subsidize the IC industry in China, equivalent to the total investment made to the industry over the past decade.
In February 2014, the government announced the program outline to further demonstrate the support they have for the industry on a national level, increasing the amount of funding into the IC industry by combining government investment and market capital investment. According to insiders, the subsidizing funds will reach up to $100 billion, providing support to the IC companies in the form of equity investments.
Chances are funds will be operated by a professional investment management team in order to invest in select exemplary companies on the market. On the other hand, the government will come out with a series of policies to provide support to the IC industry, such as tax optimization, targeted subsidies, etc.
As this subsidization program employs a market-oriented investment model, these funds will most likely be concentrated on designing, manufacturing, and packaging companies with large state capitals. Some of these IC companies with large state capital backgrounds have already initiated a series of mergers and acquisitions. Unisplendour Corporation bought Spreadtrum, a company specializing in IC designs. Datang Telecom Technology reorganized the IC design companies under itself and invested $2.5 billion to form Datang NXP Semiconductor. CEC also acquired many small IC design companies.