Software and chip firms get more support

The State Council highlighted the importance of unbiased treatment to businesses under all forms of ownership, including foreign businesses, in order to attract different types of investment in promoting the development of the sector.

Han said it is important for authorities to prioritize support measures to the sector of IC design, the weakest link in the IC sector, in future policy-making procedures, adding that there are very few foreign businesses that are devoted to chip designs in China.

Another constraining factor is the lack of talent, he said.

"The education at colleges must be more compatible with the demand of businesses and the market."

Meanwhile, the flow of talents in the IC sector from overseas must be further encouraged to address the shortage, he said.

Wei Shaojun, director of the microelectronics institute at Tsinghua University, said it is also important for businesses to bolster their investment in research and development.

"For some Chinese businesses, their investment in R&D only takes up about 10 percent of their total input, while the international average stands at about 20 percent," he said.