Hengqin, a special economic zone in China’s Zhuhai, announces incentives to attract large semiconductor companies

July 28, 2022 0 Comments

Hengqin, an island and special economic zone in the southern city of Zhuhai jointly controlled by Macau and Guangdong Province, is striving to develop a semiconductor base by offering generous cash incentives to semiconductor companies.

Hengqin, which Beijing selected as a designated area for reforms in finance and technology in the Greater Bay Area, has announced a plan to attract listed semiconductor firms to set up regional headquarters or research and development centers in the island by offering cash subsidies of up to 30 million yuan per unit.

More specifically, chip firms that establish research and development programmes in Hengqin will receive a minimum of 5-million-yuan subsidy and get 50 per cent of the tapeout cost. Any listed semiconductor firms, which has set up its regional headquarter in the islands will receive 10 million yuan in cash incentive from local government.

Chip companies, which are capable of designing 14-nanometre or lower chips, will be eligible for up to 30 million yuan in subsidies.

Special talents will also benefit from the government’s cash subsidies. Researchers and senior managers, who have inked contracts with domestic semiconductor firm located in the island, will be given subsidies of more than 100,000 yuan per person. Hengqin will also hand out 1 million yuan annually to companies that can nurture semiconductor talent in the special economic zone.

Hengqin, covering an area measuring 106.46 square kilometers, is a small island to the west of Macao and a district of Zhuhai City in China’s Guangdong province. The 106-square-kilometer island was incorporated into the Zhuhai Special Economic Zone in 2009.

The island has since become a key area for the development of strategic and emerging industries, such as high-tech, finance, and advanced manufacturing, among others. It is also an important testing ground for cooperation between Macao and Guangdong province. 

China has been working to develop its semiconductor industry so it can be more self-reliant. That plan became more urgent over the past years after the U.S placed a ban on the sales of chips to Huawei Technologies.

To support domestic manufacturers, China issued policies including subsidies and tax cuts for chip companies, as well as set up semiconductor funds to help develop designated areas into a major new outpost for its semiconductor industry.

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