Xinyuanwei and SMIC respond to rumors of trillions in subsidies for semiconductors

According to 21 Economic Net, it is rumored that China’s latest plan to invest a total of US$143 billion (equivalent to RMB 1,004.6 billion) to support domestic chip companies is mainly used to encourage Chinese companies to purchase local semiconductor equipment and provide 20% procurement cost subsidies. The plan will last for five years and is expected to be implemented as soon as the first quarter of 2023 through subsidies and tax breaks. In this regard, the reporter contacted Xinyuan Micro’s investor relations department as an investor. The relevant person said that it has always been a rumor. We have not received relevant information and are not sure about the authenticity of this news. Relevant persons from SMIC’s investor relations department responded that the media is now spreading the news, but our company has not received specific document notifications, and we have always been subsidized by the state. | Related reading (Tiger Sniff)

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The so-called “rumor” refers to a news from Reuters Hong Kong: China intends to invest more than 143 billion US dollars to support the domestic chip industry and compete with the United States. There are many details, such as: Most of the financial aid will be used to subsidize Chinese companies to purchase domestic semiconductor equipment, mainly semiconductor fabs. These companies will be entitled to a 20% subsidy of procurement costs.

Although there are a lot of small essays in the current market, some are posted by the chief, and some are screenshots just made up by netizens. However, the sources of Bloomberg and Reuters are at least more credible to institutions than those circulated on the Internet.

Therefore, the Hong Kong stock market exploded and pulled Hua Hong Semiconductor and SMIC. These two are the purest semiconductor fabs. If the rumors are true, they will benefit the most. These are all clear cards. Therefore, in the face of gossip, SMIC’s official reply seemed to confirm something, but it seemed to confirm nothing. It’s fine if everyone tacitly agrees.

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