China plans to splurge to help its chip sector overcome U.S. export curbs, but money can only do so much unless Chinese firms can break from a cycle that hinders innovation and traps them at the low end of the value chain, industry players said.
The government has earmarked $140 billion that could include subsidizing the purchase of domestically produced chipmaking equipment, likely benefiting manufacturers such as China's sole semiconductor lithography specialist, Shanghai Micro Electronics Equipment Group (SMEE).
The outlay comes in response to the United States increasingly tightening export restrictions of chipmaking technology for fear it could be used to produce chips for applications such as artificial intelligence which could be used by China's military.