The announcement of the Circular Number 18 by the State Council in June 2000 improved the development environment of the integrated circuit (IC) industry, bringing with it an investment wave. The move boosted the manufacturing technology of Chinese companies placing them on similar mainstream international levels, reported Wednesday's China Daily.

However, from an international perspective, the basic situation of the Chinese IC industry did not change much. The scale of the Chinese IC industry remained small, IC companies lacked innovation and supporting industries were backward.

Key to accelerating the IC industry is creation of a favourable environment for its development .

Such an environment must be in accord with international markets and can enhance the global competitiveness of Chinese IC companies.

A major condition for the creation of this environment is that government's policies should guide the development of the industry. It is high time to adjust and improve China's IC industry policies.

I believe the principles in this policy adjustment should be:

To give more support to the industry rather than reduction;

More support should be given to key areas and weak links, enabling every link in the industrial chain to develop smoothly;

The content of the policies should fit the trends of the country's reform and tie in with reforms in finance, taxation, technology, talent, and enterprise management;

The policies should accord with WTO principles and China's commitments to the WTO.

The policies should be open, fair and transparent, simple to execute, and save administration costs;

The policies should consider the financial capability of government at all levels and should not increase their financial burdens, while providing more resources to encourage the development of the IC industry.

New focus

The current focus of the development of the IC industry should be:

Spare no effort in developing IC design.

IC design has become a key link in our efforts to build an information society, so we must give more support to IC design and build industrial bases, optimize platforms including design kits, intellectual property libraries and other supporting tools, strengthen the protection of intellectual property rights, improve the IP marketplace, thereby building a larger, stronger and more agile IC design sector.

Expand the production capacity of IC manufacturing, packaging and testing and increase their technological capacity.

Since semiconductor production has capital-and-technology-intensive characteristics and has a comprehensive and profound influence, our policy on semiconductor manufacturing should be long-term and stable. We should make long-term strategic plans, encourage the flow of capital, technology and talent from home and abroad into semiconductor companies to ensure a high-speed, steady and harmonious development of the semiconductor manufacturing, packaging and testing industry.

We should end the "heartless" (chips are deemed to be the heart of electronic devices) situation of our information industry caused by small scale, low technology and lack of intellectual property rights of the IC industry.

Foster the development of new semiconductor components.

These components mainly refer to light-emitting components, power components, and new display components. They are an emerging branch of semiconductor components or components manufactured employing the same manufacturing techniques.

They are also key components in information devices and have huge market potential, so we should pay great attention to the development of these products and include them in national semiconductor industry policies.

Speed up the development of the semiconductor supporting industries.

Semiconductor supporting industries refer to production means and materials necessary for semiconductor manufacturing and include semiconductor-specific equipment, devices, materials, and components.

The slow progress in the development of supporting industries has become a major obstacle to the development of the whole IC industry. Thus we should draft plans to change the situation and encourage policies aimed at helping the IC industry.

If necessary, we can provide even greater policy support within a given period of time.

Source: China Daily