China's government policies for supporting the local IC design industry have put less emphasis on intervention measures such as offering tax breaks, providing direct financial support, and making purchases of domestic products, while shifting their focus to the establishment of investment funds, according to a recent Digitimes Research Special Report.
The report, titled 2015 China IC design market forecast, notes that investment funds will be set up by not only China's central government, but also local governments, aiming to foster the development of the local IC design industry. The government-led funds will play an important role in driving the industry growth during the nation's 13th Five-Year Plan period (2016-2020), Digitimes Research said.
The No. 18 Document of China's State Council already gave strong support to IC companies with tax incentives, direct financial assistance and government purchases of domestic products, Digitimes Research suggested. Between 2001 and 2010, the number of China-based IC foundries grew to nine companies from four, while the number of IC design firms increased rapidly to 479 companies from 98.
The No. 4 Document announced by China's State Council in 2011 showed that tax incentives awarded to the local IC companies have been narrowed significantly. The move indicates a change in government policies for supporting the local IC industry.