News Article
China entices sub-25 nm with tax incentive
In a move to speed up the adoption of more advanced semiconductor manufacturing processes, the Chinese government has introduced a new tax incentive program for sub 25 nanometre (nm) process semiconductor production in the region.
Despite the continued restrictions, mainly from the USA and Taiwan, on the level of advanced processing allowed into China, the country continues to drive its technology expansion faster and further than others may have intended. The latest drive to get the Chinese region below 25nm is a tax incentive programme that allows any company that has invested over eight billion yuan (US$263 million) or has process technology under 0.25-micron process to receive an operating tax reduction of 15%. Companies that invest in a sub-25nm process over a 15 year period will further receive tax free benefits for the first five years and then a 50% tax relief in the next five years dependant on profitability.
Although the new rules favour local foundries and enterprises the Chinese government has made no secret of its aggressive plans for expansion as the local market consumes more and more end product. The new incentives are sure to precipitate growth and expansion at a time that the rest of the world is preparing for a potential recession.
These types of tax breaks are the main reason behind much of the move towards Asia rather than the oft cited labour costs as these are minimal. No other country can match China for incentives to encourage local manufacturing and facilities. In fact European laws actively dissuade regions from incentivised offers to the microelectronics industry.
