Vice-premier calls for more chip support

Liu highlights formulation of industrial policy in line with national conditions

Vice-Premier Liu He has called for efforts to mobilize resources nationwide to promote the development of integrated circuits, and offer real national treatment to foreign chip experts, which industry insiders interpret as a signal of a new round of more flexible supportive policies for the semiconductor sector amid curbs from the United States.

During a tour to IC enterprises in Beijing, Liu said that to develop the industry, China should take advantage of a new system for mobilizing resources nationwide and should make better use of government and market resources.

He urged the government to formulate industrial policies in line with national conditions and new situations, play an organizational role in areas where the market fails and guide long-term investment in the field.

Also, efforts should be made to form a mechanism to tackle major problems, where companies act as the main players, and rely on entrepreneurs to achieve healthy development of the IC industry.

"It shows that China is now seeking more flexible supportive policy in order to better mobilize resources in the IC industry so as to avoid wasting time and resources while exploring ways to solve bottlenecks," said Roger Sheng, vice-president of research at U.S. market research company Gartner.

Right after the move, smartphone maker Xiaomi Corp and software and cloud company Kingsoft Corp, along with a handful of other investors, set up a 10 billion yuan ($1.45 billion) fund to develop chips and related technologies, a regulatory filing showed on Thursday.

"Amid U.S. chip sanctions, Liu's visit is expected to give strong confidence to companies and the entire chip market. It also sends a signal that a supportive policy for the semiconductor industry is likely to be launched soon," said Wang Peng, a researcher at the Beijing Academy of Social Sciences.

In addition, Liu highlighted the necessity of providing equal treatment for domestic talent alongside real national treatment for foreign experts so as to allow companies to accelerate steps to attract and nurture talent in the field.

In particular, the country must be very good at discovering and cherishing leading talent who understand technology and have strong organizational skills, Liu said.

"The remarks made clear that the country will give more preferential policies to high-end talent in the semiconductor sector," Wang added.

As the world's largest chip market, the Chinese mainland consumes more than half of the world's semiconductors, which are then assembled into tech products to be reexported or sold in the domestic market, according to research company Daxue Consulting.

The data proved what Microsoft co-founder Bill Gates said recently. During a podcast of Financial Times, Gates said that he did not get the logic of current U.S. sanctions on China and does not think the U.S. will ever be successful in preventing China from having cutting-edge chips.

"Given that China is at scale to catch up fairly quickly and I don't see how that's some gigantic benefit," Gates said.