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Integrated Circuit Industrial Policy: Government-led Performance or Market-based Operation (No.135, 2018)


By Li Yan, Research Department of Industrial Economy, DRC

Research Report, No.135, 2018 (Total 5410) 2018-8-23

Abstract: Integrated circuit (IC) industry enjoys strategic and economic dual attributes with wide application range, intensive capital, technology and personnel, and a high degree of market-based and internationalized development. Scale economy, iterative innovation, high concentration, winner-takes-all and strong constancy are the outstanding features of the competition in IC industry. China’s integrated circuit industry is in a critical period of technological catch-up and innovative development. Relying solely on the government leading or market performance may be hard to meet the current industrial demands of high-quality and rapid development. Thus, industrial policy should be formulated in a market-oriented way to strengthen the core capacity of enterprises while giving play to the advantage of the national system. Efforts need to be made to increase the constant and targeted support focusing on the industrial research, strive to improve the diversified social financing mechanism as well as the special talent incentive policy based on the market regulation, adopt the mode of open collaborative innovation and interactive development of the upstream and downstream of the industrial chain, encourage enterprises to grow bigger and stronger, and give priority to cultivating a self-controlled, well-developed and competitive industrial ecosystem.

Key words: integrated circuit industrial policy, government, market