The 12th Five-Year Plan for the Integrated Circuit Industry

　　Preface

　　The integrated circuit (IC) industry is a strategic, fundamental, and leading sector for national economic and social development. It serves as the core and foundation for fostering the development of strategic emerging industries and promoting the deep integration of informatization and industrialization. Moreover, it plays a crucial role in transforming the economic development model, adjusting the industrial structure, and ensuring national information security—its strategic importance is becoming increasingly prominent. Possessing robust integrated circuit technologies and an advanced IC industry is a key indicator of a nation’s transition toward becoming an innovation-driven country.

　　The next five to ten years represent a critical strategic window of opportunity for the development of China’s integrated circuit industry—a period that will also be pivotal in overcoming key challenges in its growth. It is of paramount practical and historical significance to make scientifically sound judgments and accurately grasp industry trends, focus on shifting development models and adjusting industrial structures, and leverage technological innovation, institutional and systemic reform, and innovative business models as driving forces. By doing so, we can strive to enhance the industry’s core competitiveness, promote its expansion and strengthening, and ensure the sustained, rapid, healthy, and robust development of the integrated circuit industry.

　　In accordance with the “12th Five-Year Plan for National Economic and Social Development,” and guided by the overarching requirements set forth in the “12th Five-Year Plan for Industrial Transformation and Upgrading,” the “12th Five-Year Plan for Strategic Emerging Industries,” the “12th Five-Year Plan for the Information Industry,” and the “12th Five-Year Plan for the Electronic Information Manufacturing Industry,” we have, on the basis of extensive surveys and in-depth research, formulated strategic development guidelines and prepared a special plan for integrated circuits. This plan will serve as a guiding document for the development of the integrated circuit industry and provide a basis for strengthening industry management.

　　I. Review of the 11th Five-Year Plan

　　During the 11th Five-Year Plan period, China’s integrated circuit industry continued the rapid growth momentum it had maintained since 2000. Despite being affected by both the global financial crisis and the silicon cycle in the integrated circuit industry, the industry’s overall strength significantly improved, and its supporting and driving role for the electronic information industry as well as economic and social development has become increasingly evident.

　　(1) The scale of the industry continues to expand.

　　The industry’s scale has doubled. Production and sales revenue rose from 26.58 billion units and 70.2 billion yuan in 2005 to 65.25 billion units and 144 billion yuan in 2010, respectively. The share of the global integrated circuit market increased from 4.5% in 2005 to 8.6% in 2010. The domestic market size expanded from 380 billion yuan in 2005 to 735 billion yuan in 2010, accounting for 43.8% of the global integrated circuit market share.

　　(2) Significantly enhanced innovation capability

　　With the support of major national science and technology programs such as “Core Electronic Components, High-End General-Purpose Chips, and Basic Software Products” and “Manufacturing Equipment and Complete Processes for Ultra-Large-Scale Integrated Circuits,” most design companies now possess design capabilities down to 0.25 micrometers and beyond, with advanced design capacities reaching as low as 40 nanometers. Significant breakthroughs have been achieved in high-end general-purpose chips—including central processing units (CPUs), digital signal processors (DSPs), microcontroller units (MCUs), and memory devices—and a number of system-on-chip (SoC) products, such as time-division synchronous code division multiple access (TD-SCDMA) chips, digital television chips, and information security chips, have entered large-scale production. Chip manufacturing capabilities continue to strengthen, with advanced 65-nanometer processes and specialized technologies like high-voltage and analog processes now being produced on a large scale. Various advanced packaging technologies, including quad flat no-leads (QFN) packages, ball grid array (BGA) packages, and wafer-level packaging (WLP), have been successfully developed and industrialized. Key equipment such as high-density ion etching machines, large-angle ion implanters, and 45-nanometer cleaning equipment have been put into production lines, and notable progress has been made in critical materials technologies, including photoresists, packaging materials, and target materials.

　　(3) Further optimization of the industrial structure

　　China’s integrated circuit industry has established a relatively coordinated development pattern characterized by the parallel advancement of three key sectors: chip design, chip manufacturing, and packaging & testing. The share of sales revenue from the design sector in the overall industry has been increasing year by year, rising from 17.7% in 2005 to 25.3% in 2010. The share of the chip manufacturing sector has remained stable at around one-third. Meanwhile, the specialized equipment, instruments, and materials industry for integrated circuits has achieved a certain industrial scale, providing strong support for the development of the integrated circuit industry as well as the solar photovoltaic and optoelectronic industries.

　　(4) The company’s strength has significantly increased.

　　Four integrated circuit enterprises have entered the top 100 in the electronic information sector. More than 60 integrated circuit design companies have achieved sales revenues exceeding 100 million yuan. In 2010, the threshold for entering the top ten design companies was 600 million yuan—a figure that has more than doubled since 2005. HiSilicon Semiconductor, ranked first, reported sales revenues of 4.42 billion yuan. Among manufacturing companies, two have achieved sales revenues exceeding 10 billion yuan; SMIC’s 65-nanometer manufacturing process now accounts for 9% of its total production capacity, making it the world’s fourth-largest chip foundry. In the top ten packaging and testing companies, Chinese-funded enterprises have significantly improved their standing, with ChangElectronics Technology now ranking among the global top ten packaging and testing firms.

　　(5) The agglomeration effect of the industry is becoming more prominent.

　　Relying on advantages such as markets, talent, and capital, the integrated circuit industries in the Yangtze River Delta, the Beijing-Tianjin-Bohai Rim region, and the Pan-Pearl River Delta continue to develop rapidly. The clustering and driving effects of five national-level integrated circuit industrial parks and eight integrated circuit design industrialization bases have become even more pronounced. By adhering to a path of specialized development, central and western regions—including Wuhan, Chengdu, Chongqing, and Xi'an—increasingly play an important role as growth wings.

　　Despite the remarkable achievements during the 11th Five-Year Plan period, China’s integrated circuit industry still faces numerous challenges. The industry remains relatively small in scale, with insufficient self-sufficiency and a low domestic market share for its products. Enterprises are small and fragmented, lacking strong capabilities for sustained innovation, possessing few core technologies, and lagging significantly behind advanced international standards. The industry also suffers from weak value-chain integration; a coordinated mechanism linking chips with complete devices has yet to be established, and most domestically developed chips have not yet found their way into key application areas for finished products. Furthermore, the industrial chain is incomplete, and the development of specialized equipment, instruments, and materials lags behind.

　　II. The Situation Facing the 12th Five-Year Plan

　　The integrated circuit industry is a strategic high ground that major countries and regions around the world are vying to seize. On the one hand, innovation in this field remains vigorous; microfabrication technologies continue to advance along Moore’s Law, the competitive market landscape is accelerating its transformation, and the challenges posed by the intense concentration of capital, technology, and talent are becoming increasingly severe. On the other hand, over the years, China’s integrated circuit industry has accumulated dynamic technological innovation, strong market expansion capabilities, robust momentum for resource integration, and vast market potential—laying a solid foundation for the industry to achieve rapid development and reach a new level over the next five years.

　　(1) The rise of strategic emerging industries injects new momentum into industrial development.

　　Currently, strategic emerging industries—represented by mobile internet, triple-play convergence, the Internet of Things, cloud computing, energy conservation and environmental protection, and high-end equipment—are rapidly developing. These industries will become a new driving force behind the development of the integrated circuit industry, following in the footsteps of computers, network communications, and consumer electronics. The convergence of multiple technologies and applications is giving rise to new integrated circuit products. Over the past five years, China’s integrated circuit market has grown at an average annual rate of 14%, reaching 734.95 billion yuan in 2010. It is projected that by 2015, the domestic integrated circuit market size will exceed one trillion yuan. This vast, multi-tiered market provides ample room for growth for local integrated circuit enterprises. Moreover, the global trend toward increasingly refined industrial division of labor also presents opportunities for latecomer countries to enter specialized global markets.

　　(2) The roadmap for the evolution of integrated circuit technology is becoming increasingly clear.

　　On the one hand, the pursuit of lower power consumption, higher integration, and smaller size remains the focal point of technological competition, making SoC design technology the dominant force. As chip integration continues to increase, we will remain on track to follow Moore’s Law. Currently, the 32-nanometer process has already entered mass production internationally, and the 18-nanometer process is set to be adopted by 2015. On the other hand, there is a clear trend toward product feature diversification. While continuing to strive for narrower linewidths, manufacturers are leveraging a variety of mature and specialized manufacturing processes and adopting advanced packaging technologies such as System-in-Package (SiP) and 3D stacking to integrate an ever-greater number of digital and non-digital functions into a single chip. Moreover, integrated circuit technology is poised to usher in new major breakthroughs. New materials, new architectures, and new processes will push beyond the physical limits imposed by Moore’s Law, thereby sustaining the continued advancement of microelectronics technology.

　　(3) The global competitive landscape of the integrated circuit industry continues to undergo profound changes.

　　The global integrated circuit industry is now entering a period of major structural adjustment. Major countries and regions are all treating the accelerated development of the integrated circuit industry as a strategic high ground for seizing leadership in emerging industries, and they are investing heavily in innovative resources and capabilities. Since the international financial crisis, companies such as Intel, Samsung, Texas Instruments, and TSMC have stepped up their efforts to adopt advanced manufacturing processes, sped up the integration and restructuring of resources, continuously expanded production capacity, strengthened their control over key links in the industrial chain, and enhanced their ability to integrate upstream and downstream sectors—all in a rush to widen the gap with their competitors. The further raising of industry entry barriers poses an even more daunting challenge for domestic integrated circuit enterprises that lack sufficient accumulation of resource and innovation factors.

　　(4) Business model innovation brings opportunities for industries in the new round of competition.

　　The connotation of innovation continues to enrich, and innovation in business models has become a crucial choice for enterprises seeking to gain competitive advantages. Currently, the development of system-on-chip solutions that integrate both software and hardware, nanoscale manufacturing technologies, and high-density packaging places higher demands on integrated circuit companies’ ability to integrate upstream and downstream industrial chains and ecosystem networks, thereby driving the rise of the integrated device manufacturer (IDM) model. In particular, with the growth of emerging fields such as mobile internet terminals, new business models like “Google-ARM” and Apple have emerged, posing significant challenges to the traditional “WINTEL (Microsoft and Intel) ecosystem.”

　　(5) The implementation of the new policy creates a better environment for industrial development.

　　During the 12th Five-Year Plan period, the continued implementation of major national science and technology projects and the new requirements for developing strategic emerging industries will drive breakthroughs in core integrated circuit technologies and sustain the robust growth of the integrated circuit industry. The “Notice of the State Council on Issuing Several Policies to Further Encourage the Development of the Software and Integrated Circuit Industries” (Guofa [2011] No. 4) builds upon and continues the policies outlined in the “Notice of the State Council on Issuing Several Policies to Encourage the Development of the Software and Integrated Circuit Industries” (Guofa [2000] No. 18). It further intensifies support for the integrated circuit industry, expands the scope of support, and ensures that preferential policies cover all links in the industrial chain, thereby further optimizing the environment for industrial development.

　　III. Guiding Ideology, Basic Principles, and Development Goals

　　(1) Guiding Ideology and Basic Principles

　　Thoroughly implement the Scientific Outlook on Development, taking the transformation of development modes and structural adjustment as the main thread. Adhere to the principles of "application-driven, innovation-driven, coordinated advancement, and leading development," and use common key technologies and major products as breakthroughs to enhance the core competitiveness of industries. Optimize industrial structures and extend and improve industrial chains. Vigorously promote the integration and optimization of resources, fostering large enterprises with international competitiveness. Implement industrial policies and build a comprehensive public service system for industries. Enhance the quality and efficiency of industrial development, actively participate in the global division of labor within industries, and strengthen domestic supply capabilities for key products. Optimize the industrial ecological environment, create large-scale integrated industrial chains spanning chips and complete equipment, and provide strong support for industrial transformation and upgrading, informationization construction, and national information security assurance.

　　Adhere to application-driven development. Driven by major initiatives in information technology promotion and the demand for complete equipment, develop a batch of integrated circuit products that are widely applicable, broadly deployed, and tailored for specific applications. For key areas and critical links, leverage the government’s role in strategic planning, policy incentives, and organizational coordination.

　　Uphold innovation-driven development. In conjunction with the implementation of major national science and technology programs and projects, leverage technological innovation, model innovation, and institutional and systemic innovation as driving forces to achieve breakthroughs in a number of common and critical technologies. Strengthen efforts to introduce, digest, absorb, and re-innovate, and pursue a path of open innovation and internationalized development.

　　Adhere to coordinated advancement. Adjust and optimize the industrial structure, with a focus on developing the chip design industry, strengthening the chip manufacturing sector, upgrading the packaging and testing capabilities, and enhancing the independent R&D and supply capacity of key equipment, instruments, and materials. Following the principles of "supporting the excellent, strengthening the strong, and scaling up the large," optimize enterprise organizational structures and promote mergers, restructuring, and alliances among enterprises. Optimize regional layouts to avoid low-level, duplicate construction.

　　Uphold leadership in development. Combine expanding scale with enhancing competitiveness, fully leverage the leading and driving role of the integrated circuit industry, advance research and development and industrialization of key technologies in strategic emerging industries, and support the transformation and upgrading of traditional industries.

　　(2) Development Goals

　　By the end of the 12th Five-Year Plan, the industry’s scale will more than double, breakthroughs will be achieved in key core technologies and products, structural adjustments will yield significant results, the industrial chain will be further refined, a group of internationally competitive enterprises will emerge, and a technology innovation system—centered on enterprises and integrating industry, academia, research, and application—will be basically established.

　　1. Key Economic Indicators

　　Integrated circuit production exceeded 150 billion units, with sales revenue reaching 330 billion yuan, representing an average annual growth rate of 18%. This accounts for approximately 15% of the global integrated circuit market share and meets nearly 30% of domestic market demand.

　　2. Structural Adjustment Goals

　　Industry Structure: The chip design industry’s share of total industry sales revenue has risen to around one-third, while the chip manufacturing and packaging & testing industries together account for approximately two-thirds. This has resulted in a relatively balanced three-industry structure. Moreover, the supporting role of specialized equipment, instruments, and materials for the entire industry has further strengthened.

　　Enterprise Structure: Foster 5 to 10 leading design enterprises with sales revenues exceeding 2 billion yuan each, and one enterprise that ranks among the top ten global design firms; 1 to 2 leading chip manufacturing enterprises with sales revenues exceeding 20 billion yuan each; 2 to 3 leading packaging and testing enterprises with sales revenues exceeding 7 billion yuan each, and ensure that these enterprises rank among the top ten globally in the packaging and testing industry; and cultivate a group of dynamic, innovative small and medium-sized enterprises.

　　Regional Structure: Adhere to a rational regional layout and continue strengthening the three major agglomeration zones—Yangtze River Delta, Beijing-Tianjin-Bohai Rim, and Pan-Pearl River Delta—as well as the industrial layout centered on Chongqing, Chengdu, Xi'an, and Wuhan. Build a number of industrial clusters with complete industrial chains, strong innovation capabilities, and distinctive features.

　　3. Technological Innovation Goals

　　Chip Design Industry: Advanced design capabilities have reached 22 nanometers, and a batch of core chips with independent intellectual property rights has been developed. The proportion of domestically produced integrated circuit products independently developed for key domestic end-use applications has reached over 30%.

　　Chip Manufacturing: Large-scale production technologies have reached a complete process flow for 12-inch wafers at 32 nanometers, with the gradual introduction of 28-nanometer processes. We have mastered specialized process technologies such as advanced high-voltage processes, MEMS processes, and silicon-germanium processes.

　　Packaging and Testing Industry: Enter the international mainstream market, further enhance technical capabilities in flip-chip (FC), BGA, chip-scale packaging (CSP), multi-chip packages (MCP), and other advanced packaging technologies, strengthen the development of new packaging and testing technologies such as SiP and high-density three-dimensional (3D) packaging, and achieve mass production capacity.

　　Specialized integrated circuit equipment, instruments, and materials: Key equipment has reached the 12-inch, 32-nanometer process technology level; 12-inch silicon single crystals and epitaxial wafers have achieved mass production, and key materials are being applied in chip manufacturing processes and have also entered mass production.

　　IV. Main Tasks and Development Priorities

　　(1) Main Tasks

　　1. Concentrate efforts and integrate resources to overcome a batch of common, critical technologies and major products.

　　Strengthen top-level design and overall coordination, focusing on national strategies and key system-level demands. Targeting industry-wide common critical technologies and major products, we will guide and support the establishment of open, integrated innovation platforms for integrated circuit technology—leveraging leading institutions—to foster collaboration among industry, academia, research, and application. These platforms will prioritize the development of common key technologies across all segments of the industrial chain, including SoC design, nanometer-scale manufacturing processes, advanced packaging and testing, cutting-edge equipment, instruments, and materials. We will also make strategic deployments for a number of major product projects. We will improve mechanisms for technological innovation investment, R&D, commercialization, and application, striving to achieve significant technological breakthroughs in key areas, cultivate a group of high-value-added, cutting-edge products, and establish a technology innovation system that is enterprise-led, market-oriented, and integrates industry, academia, and research.

　　2. Strengthen, optimize, and scale up key enterprises to enhance their core competitiveness.

　　Increase the tilt of factor resources and policy support, optimize the allocation of industrial resources, and promote strong alliances among leading enterprises, cross-regional mergers and reorganizations, overseas M&A activities, and international investment cooperation. Foster various forms of enterprise integration, encouraging integration among similar enterprises, integration between upstream and downstream enterprises, and integration between complete equipment manufacturers and integrated circuit companies. Cultivate a number of design firms, manufacturing firms, packaging and testing firms, as well as equipment, instrument, and materials enterprises that possess international competitiveness. Develop a group of specialized, refined, distinctive, and innovative small and medium-sized enterprises, and strive to establish an industrial organizational structure in which large, medium, and small enterprises complement each other’s strengths and achieve coordinated development.

　　3. Improve the industrial ecosystem and build a large-scale integrated industry chain spanning chips and complete devices.

　　Promote collaborative development and industrialization across product definition, chip design and manufacturing, and packaging & testing. Implement several specialized “end-to-end” initiatives spanning from integrated circuits and software to complete devices, systems, and applications, thereby fostering a symbiotic industrial ecosystem and value chain. Guide chip design companies and whole-machine manufacturers to strengthen cooperation: use whole-machine upgrades to drive effective R&D in chip design, and leverage chip-design innovation to enhance the competitiveness of whole-machine systems. Under government guidance, harness the role of market mechanisms, actively explore and realize the virtual IDM model, jointly build value chains, create a favorable industrial ecosystem, and enable breakthroughs and leaps for enterprises across the upstream and downstream sectors.

　　4. Improve and strengthen the multi-level public service system to promote the sustained and rapid development of industries.

　　In response to major innovation needs in the industry, we will adopt an open construction philosophy, concentrate superior resources, and establish a national-level integrated circuit R&D center that operates in a corporate manner, is industry-oriented, and integrates research, education, industry, and application. This center will focus on developing common key technologies across various links of the industrial chain—including product design such as SoCs, nanometer-scale process manufacturing, and advanced packaging and testing—providing both technological sources and technical support for achieving sustainable industrial development. We will also support the construction of public service platforms for integrated circuits, offering enterprises product development and testing environments as well as application promotion services, thereby fostering the growth of small and medium-sized enterprises and turning these platforms into vital hubs for communication and collaboration between chip manufacturers and complete equipment makers.

　　(2) Development Priorities

　　1. Focus on developing the chip design industry and creating high-performance integrated circuit products.

　　Focusing on the application needs in strategic emerging industries and key areas such as mobile internet, smart home appliances, triple-play convergence, Internet of Things, smart grids, and cloud computing, we will innovate project organization models, taking complete systems as the driving force. We will break through bottlenecks in high-end general-purpose chips—including CPUs, DSPs, and memory—and prioritize the development of mass-market chips such as network communication chips, mixed-signal chips, information security chips, digital TV chips, radio-frequency identification (RFID) chips, and sensor chips. Additionally, we will focus on developing specialized integrated circuit products tailored to the integration of IT and industrialization and to key sectors of strategic emerging industries, thereby building comprehensive system solution capabilities. We will also support the development of advanced electronic design automation (EDA) tools and establish a demonstration platform for promoting EDA applications.

　　Column 1: Joint Construction Project for the Chip and Complete Machine Value Chain

　　High-end general-purpose chips: Strengthen research on system architecture, algorithms, and hardware-software co-design; develop high-end general-purpose chips such as supercomputer and server CPUs, desktop and laptop CPUs, ultra-low-power high-performance embedded CPUs, high-performance DSPs, and dynamic random-access memory (DRAM). These chips will be mass-produced and widely deployed in the fields of Party, government, military, and critical industries' informationization, thereby establishing industrial-scale production capabilities and the ability to compete effectively in the market.

　　Mobile Smart Terminal SoC Chips: Targeting the mobile smart terminal market—represented by tablets and smartphones—these chips are built on ultra-low-power, high-performance embedded CPUs. Adhering to a development strategy that emphasizes software-hardware synergy, international compatibility, and independent innovation, we are developing a mobile smart terminal SoC product platform. This platform will break through key technologies such as multi-mode internet access, diverse application support, and system-level low-power design, thereby fostering a fully integrated ecosystem for the mobile smart terminal industry.

　　Network communication chips: Focusing on the industrialization of Time Division-LTE (TD-LTE), we will develop TD-LTE terminal baseband chips and terminal RF chips, thereby enhancing the capabilities of key links in the TD-LTE and its enhanced industry chain and building a comprehensive industrial ecosystem/value chain—from chips and mobile operating systems to branded devices. We will also develop critical chips for digital trunking communications, short-range broadband transmission chips, and optical communication chips.

　　Digital TV chips: In response to the trends of triple-play convergence, terminal integration, and content fusion, we will focus on breakthroughs in new digital TV SoC architectures, image processing engines, multi-format video decoding, video format conversion, and stereoscopic display processing technologies. We will continue to enhance our chip design and manufacturing capabilities in the fields of satellite broadcasting and terrestrial transmission.

　　Smart Grid Chips: Focusing on the development of various chips for smart grid construction, including those applied to smart grid transmission and transformation systems, new-energy grid-connection systems, motor energy-saving control modules, and electricity metering, billing, and data transmission control modules.

　　Information security and video surveillance chips: Develop specialized chips for secure storage, encryption, decryption, and other information security functions; enhance chip computing speed and resistance to attacks; and promote the hardware implementation of information security features. Meet the needs of smart city development by designing video surveillance SoC chips.

　　Automotive electronic chips: To meet the needs of automotive information and electronics platforms, we are developing core chips for automotive control systems and in-vehicle information systems, including audio/video and information terminal chips for vehicles, power control and management chips, and body control chips. We are also actively supporting the development of new-energy vehicles by developing chips and modules for motor drive and control, power storage, and charge/discharge management.

　　Financial IC Cards/RFID Chips: In line with the trend of banking cards shifting from magnetic stripe cards to IC cards, we are developing financial IC card chips that meet stringent requirements for electrical performance, reliability, and security. These chips feature independent innovation, comply with relevant technical and application standards, support multiple applications, and promote the establishment of a financial IC card chip testing and certification center. We are also developing ultra-high-frequency RFID chips to meet the needs of the rapidly growing Internet of Things (IoT) ecosystem.

　　Microcontroller (MCU) chips for CNC and industrial control systems: Develop an MCU chip series widely used in household appliance control, metering and billing transmission control for water meters and other utilities, production process control, and intelligent control of medical and healthcare devices. Strengthen research on application development and enhance the capability to provide development tools. Conduct chip engineering projects focusing on high-end DSPs, analog-to-digital/digital-to-analog converters (ADC/DAC), and field-programmable gate arrays (FPGAs) to meet actual application needs.

　　Smart Sensor Chips: Specifically selected smart sensor chips with practical application targets for IoT applications, focusing on developing integrated technologies for smart sensors and node processors, ultra-low-power design techniques, and information pre-processing technologies.

　　2. Expand the scale of the chip manufacturing industry and strengthen capabilities in advanced and specialized process technologies.

　　Continuously support the technological upgrades and capacity expansions of the 12-inch advanced process manufacturing line as well as the 8-inch and 6-inch specialty process manufacturing lines. Accelerate the R&D and application of manufacturing process technologies at or below 45 nanometers, and strengthen the development of standard process modules, specialty process modules, and IP cores. Attract investment into the integrated circuit sector through multiple channels, guide industrial resources to concentrate on enterprises and regions with solid foundations and favorable conditions, create scale effects, and promote the scientific development of integrated circuit chip manufacturing line construction.

　　Column 2: Construction of Advanced/Specialty Process Production Lines and Capability Enhancement Project

　　Development of advanced processes and construction of production lines. Accelerate the scaled and intensive construction of 12-inch advanced-process production lines. Adhering to internationalization principles and adopting an open and collaborative approach, we will promote the R&D and industrialization of advanced processes at 45nm, 32nm, and 28nm, laying a solid foundation for the R&D and mass production of 22nm technologies. This will significantly narrow the international technology gap and establish a specialized foundry industry with international competitiveness and sustained development potential.

　　Development of specialized process technologies and construction of dedicated production lines. We will support the development of cutting-edge technologies such as analog processes, mixed-signal processes, microelectromechanical systems (MEMS) processes, radio-frequency processes, and power-device processes, and promote the establishment of specialized process production lines. We will accelerate the development and industrialization of manufacturing processes based on strained silicon, silicon-on-insulator (SOI) technology, and compound semiconductor materials.

　　3. Enhance the sophistication and capabilities of the packaging and testing industry, and develop advanced packaging and testing technologies and products.

　　In line with the important development trend of integrated circuit products toward greater functional diversity, we will vigorously develop advanced packaging and testing technologies, accelerate the advancement of high-density stacked three-dimensional packaging products, and support upgrades in packaging process technologies as well as capacity expansion. We will also enhance both the technical level of testing and the scale of the industry.

　　4. Improve the industrial chain and break through bottlenecks in key specialized equipment, instruments, and materials.

　　Promote the industrialization of 8-inch integrated circuit equipment, support the R&D of 12-inch integrated circuit production equipment, strengthen the development of new equipment, new instruments, and new materials, establish complete process packages, and facilitate the large-scale application of domestically produced equipment on production lines. Cultivate a group of leading enterprises with strong independent innovation capabilities, foster close collaboration among all links of the integrated circuit industry chain (including design, manufacturing, packaging and testing, equipment and instruments, and materials), set up experimental platforms, and accelerate industrialization.

　　Column 3: Integrated Circuit Industry Chain Extension Project

　　Advanced packaging and testing. We support advanced packaging and testing technologies such as BGA, CSP, multi-chip modules (MCM), WLP, 3D, and through-silicon vias (TSV), and are advancing the development of integrated circuit products—including MCP, SiP, package-in-package (PiP), and package-on-package (PoP)—particularly high-density stacked 3D packaging solutions.

　　Dedicated equipment, instruments, and materials. Support the development and application of equipment such as etching machines, ion implanters, epitaxy furnaces, planarization equipment, and automated packaging systems, and establish complete process flows. Strengthen R&D and industrialization of key materials including 12-inch silicon wafers, SOI substrates, lead frames, and photoresists. Also, support the large-scale application of domestically produced critical equipment, instruments, and raw materials for integrated circuits on production lines.

　　V. Policy Measures

　　(1) Implement policies and regulations, and improve the public service system.

　　Implement and carry out Document No. 4 [2011] issued by the State Council, and accelerate the formulation of relevant implementation rules and supporting measures. Strengthen industry research and adjust the "Catalog of Tax-Exempt Imported Raw Materials and Consumables for Self-Use in Integrated Circuit Production" as appropriate. Further refine the legal framework for integrated circuit development, improve the public service system for the integrated circuit industry, enhance the construction of public service platforms, and promote closer links between design and application.

　　(2) Enhance the efficiency of fiscal fund utilization and expand investment and financing channels.

　　Carefully organize and implement major national science and technology projects as well as innovation initiatives for strategic emerging industries, break through key core chips for critical complete-machine systems, and support and deploy preliminary research on new devices, novel principles, and advanced materials. Through channels such as technological transformation funds, special funds for integrated circuit research and development, and the Electronic Information Industry Development Fund, continuously support the enhancement of independent innovation capabilities and core competitiveness in the integrated circuit industry. Encourage state-owned policy-based financial institutions to provide support for key integrated circuit technology upgrades, technological innovations, and industrialization projects. Encourage large enterprise groups across various industries to take equity stakes in or merge with integrated circuit enterprises. Support integrated circuit enterprises in raising funds through IPOs both domestically and internationally, guide financial and securities institutions to actively support the development of the integrated circuit industry, and facilitate the listing of qualified innovative small and medium-sized enterprises on the SME Board and the ChiNext Board. Encourage all types of domestic and foreign economic organizations and individuals to invest in the integrated circuit industry.

　　(3) Promote resource integration and foster large enterprises with international competitiveness.

　　In accordance with the principles of strategic coordination and efficient resource allocation, we will systematically promote mergers and acquisitions and restructuring involving enterprises of all ownership types. By establishing guiding funds, providing direct capital injections, offering interest subsidies on loans, and waiving or reducing related fees, we will address fragmentation and duplication, facilitate enterprise integration, optimize corporate structures, enhance industrial concentration, and foster a group of large-scale enterprises that align with the development directions of key products and advanced technologies—thus meeting the demands of the new landscape of industrial development and international market competition. We will also strengthen close collaboration among government, banks, and enterprises, mobilizing, guiding, and tapping into relevant resources, and broadly establish project-development platforms for financial cooperation between banks and enterprises, thereby deepening and expanding cooperation among government, banks, and enterprises. Furthermore, we will support the development of industry alliances: horizontal alliances will drive technological and process breakthroughs, while vertical alliances will accelerate the industrialization process and help establish application markets.

　　(4) Continue to expand opening up to the outside world and improve the quality of foreign investment utilization.

　　We will remain committed to opening up to the outside world, continue optimizing our business environment, and vigorously attract foreign (overseas) capital, technology, and talent, thereby facilitating the transfer of high-end international industries to China. We will encourage multinational corporations to establish R&D centers, production centers, and operational hubs in China. We will also encourage Chinese research institutions to increase their R&D investment and introduce cutting-edge R&D projects, and promote cooperation between foreign-funded R&D institutions and local counterparts. We will refine the approval procedures for foreign-invested projects, adjust the "Guidance Catalog of Industries for Foreign Investment" as appropriate, and guide the direction of foreign investment. Moreover, we will encourage enterprises to expand international cooperation, integrate and acquire overseas resources, set up overseas R&D centers, and actively explore international markets.

　　(5) Strengthen talent development and actively attract overseas talent.

　　Establish and improve a talent-training system for integrated circuits, accelerate the construction and development of microelectronics colleges and microelectronics vocational training institutions, and build a multi-level talent pipeline. Focus on cultivating internationally-minded, high-caliber, and multidisciplinary integrated-circuit professionals. Intensify efforts to attract international talent by creating a favorable policy environment and vigorously bringing in outstanding foreign experts in integrated circuits. Introduce competitive incentive mechanisms and formulate reward policies and allocation systems that effectively stimulate the creativity and talents of our workforce. Pay close attention to environmental development and strive to foster an entrepreneurial community that is pioneering and possesses a global perspective.

　　(6) Implement an intellectual property strategy and strengthen the protection of intellectual property rights.

　　Vigorously implement an intellectual property strategy and master a batch of key technologies with independent intellectual property rights in priority technological fields. Encourage enterprises to register integrated circuit layout designs and strengthen the effective utilization of exclusive rights to such layouts. Conduct intellectual property assessments within specific projects, intensify efforts to protect intellectual property rights, and promote fair and orderly market development. Encourage industry organizations, industry-academia-research-application alliances, and other entities to carry out patent landscape analyses and establish intellectual property early-warning mechanisms. Through intellectual property exchanges and cooperation, foster the development of the integrated circuit industry.