Matters:
On January 19, the Shanghai Municipal People’s government issued several policies for promoting the high-quality development of Shanghai’s integrated circuit industry and software industry in the new era (hereinafter referred to as the policy), which defined the general principles and supporting policies in all aspects, such as talent, enterprise cultivation, investment and financing, R & D and application, collaborative innovation in the Yangtze River Delta, industry management and so on.
Ping An View:
The policy pays more attention to the special fund support for the production, equipment, materials, EDA and other core links of the integrated circuit industry chain. The policy proposes that the municipal special fund for strategic emerging industries will further increase support for projects that meet the following conditions: (I) for major integrated circuit equipment and materials projects that have made major breakthroughs in independent research and development such as parts and raw materials and achieved actual sales, the support proportion is 30% of the new investment of the project, and the support amount is not more than 100 million yuan in principle; (II) for major projects of EDA, basic software, industrial software and information security software, the new investment of the project can be relaxed to no less than 50 million yuan, the support proportion is 30% of the new investment of the project, and the support amount is not more than 100 million yuan in principle; (III) for qualified design enterprises to carry out streaming services conducive to promoting the application of process production lines with integrated circuit line width less than 28 nm (including), the relevant streaming fees shall be included in the new investment of the project, and 30% support shall be given to the streaming fees, and the amount of support shall not be more than 100 million yuan in principle. At the same time, the policy also proposes to strengthen the production capacity guarantee of small and medium-sized integrated circuit design enterprises, establish a mechanism to give priority to the production capacity demand of small and medium-sized design enterprises undertaking national technical research tasks or developing important products.
The policy has further improved some contents of the previous round of policies, and new provisions have strengthened overall planning and linkage support. In terms of investment and financing support policies, the policy proposes innovative credit support and software industry financing methods, and supports insurance institutions to participate in the development of integrated circuit industry. The policy points out to strengthen the supply of insurance products suitable for the characteristics of the integrated circuit industry, explore the establishment of integrated circuit insurance coinsurance and catastrophe risk dispersion mechanism, support the online verification of independent safe and controllable equipment, materials and EDA, and study and formulate insurance premium subsidy support policies for key areas and key projects, This innovative measure is conducive to enhancing the confidence of the upstream and downstream of the integrated circuit industry chain for common development. In terms of R & D and application support policies, the policy arranges major scientific and technological projects around key areas such as integrated circuit equipment and materials, emphasizes optimizing the first round of integrated circuit product streaming policy, and focuses on supporting small and medium-sized design enterprises and important innovation platforms to carry out the first round of engineering product streaming by using the city’s integrated circuit production line and pilot test line. In addition, we will increase support for the verification and application of independent, safe and controllable equipment and materials, and give certain R & D subsidies to those whose integrated circuit production lines and pilot test lines provide verification services for the first set of equipment and the first batch of new materials of integrated circuits in the city. Among them, the maximum verification of single equipment shall not exceed 1 million yuan, and the maximum verification of each batch of materials shall not exceed 500000 yuan.
In addition to continuously increasing support for the city, the policy also focuses on supporting the coordinated development of the Yangtze River Delta. The policy states that it is necessary to rely on the national technology innovation center of the Yangtze River Delta to build a demand information release platform for “leading the list” of key components and materials of integrated circuits and core algorithm technology, serve the needs of enterprise technology R & D and industrial chain development cooperation, and focus on attracting all kinds of innovation subjects in the Yangtze River Delta to participate in the list. For the first application of the city’s major IC equipment in the demonstration application stage in the integrated circuit production line of the Yangtze River Delta, certain support shall be given according to the “manufacturer user” two-way support policy of the special fund, so as to promote the joint development of the integrated circuit equipment industry in the Yangtze River Delta. At the same time, the Yangtze River Delta software algorithm, information technology application innovation and EDA competition will be held to attract the application of global innovative algorithms and information technology innovation achievements in Shanghai.
Investment suggestion: integrated circuit industry and software industry are strategic and basic industries and key forces leading a new round of technological and industrial changes. The policy is the deepening, implementation and continuation of the notice of the State Council on printing and Distributing Several Policies to promote the high-quality development of integrated circuit industry and software industry in the new era (GF [2020] No. 8), covering integrated circuit production, equipment, materials, design (including IP and EDA), advanced packaging and testing Enterprises and institutions engaged in software product development and information technology services, and put integrated circuits in a more prominent position, which shows Shanghai’s determination to take the integrated circuit industry as a major focus of economic development, and paves the way for the future development of Shanghai’s integrated circuit and software industry. As a pioneer area in the development of China’s integrated circuit industry, Shanghai’s industrial cluster advantages will continue and maintain the trend of vigorous development. We believe that companies in related semiconductor upstream materials, equipment, design, EDA and other subdivided fields will gain greater development space in the future. We recommend Will Semiconductor Co.Ltd.Shanghai(603501) , and we suggest paying attention to Advanced Micro-Fabrication Equipment Inc.China(688012) , Shanghai Sinyang Semiconductor Materials Co.Ltd(300236) , and Gallen electronics.
Risk tips: 1) policy support and implementation are not as strong as expected; 2) Macroeconomic downside risk; 3) The game between China and the United States has intensified.
