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US-China tech war: Shanghai to woo semiconductor talent and support local chip development with shower of cash

  • Government will subsidise up to 30 per cent of investment in semiconductor materials and equipment projects in the city
  • The city’s 14th Five Year Plan lists semiconductor and artificial intelligence as two pillars underpinning future technology development

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Shanghai is offering generous subsidies to attract semiconductor talent to the city. Photo: Bloomberg

The Shanghai municipal government is rolling out a slew of generous incentives to attract talent and firms along the semiconductor supply chain, as part of China’s drive to fast track domestic chip industry development.

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According to a government policy document published on Wednesday, the Shanghai government will subsidise up to 30 per cent of investment – up to a total of 100 million yuan (US$15 million) – in semiconductor materials and equipment projects in the city.

It will also subsidise 30 per cent of investment in chip software projects, such as electronic design automation (EDA) tools, up to the ceiling of 100 million yuan.

The same 30 per cent subsidy policy also applies to tape-out – where semiconductors are tested for flaws before they are sent for mass manufacturing – for chips with nodes less than 28-nanometres.

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Analysts said the move signalled Shanghai’s resolve to help China overcome US sanctions targeting the country’s chip industry and would help cement the city’s position in the industry.

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“The new policy incentive is stronger in amplitude than those in the past,” said William Wang, CEO at Shanghai-based consultancy IC Cafe. “It will also help Shanghai to attract and retain [semiconductor] talent to live and work here.”

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