China is weighing a semiconductor incentives package worth as much as $70 billion in a sweeping effort to turbocharge its domestic chip industry, according to a Bloomberg report citing people familiar with internal discussions. The proposal, still under deliberation, would direct between 200 billion yuan and 500 billion yuan in subsidies and financial support to chipmakers Beijing views as critical in its technological standoff with the United States.
The size of the plan signals China’s determination to reduce reliance on foreign suppliers such as Nvidia and to bolster the national champions it sees as essential to future competitiveness, including Huawei Technologies and Cambricon Technologies. Even at the lower end, the package approaches the scale of Washington’s Chips Act, underscoring how aggressively Beijing is moving to secure control over advanced semiconductor production.
Sources told Bloomberg that the new program would operate independently of existing initiatives such as the $50 billion Big Fund III, China’s flagship semiconductor investment vehicle. Final details, including exact funding levels and targeted companies, are still being finalized, and China’s Ministry of Industry and Information Technology has not publicly commented on the deliberations.
The push comes as governments from Europe to the Middle East ramp up their own chip investments, viewing semiconductors as vital to artificial intelligence and national security. China’s estimated $142 billion in chip-related spending already dwarfs many international commitments, a reflection of President Xi Jinping’s “whole-nation” approach to closing the technological gap with the US. Beijing remains deeply concerned about the unpredictability of access to US technology after years of tightening export controls by three successive administrations.
China’s semiconductor ecosystem has shown signs of rapid acceleration under this mandate. Semiconductor Manufacturing International Corp., the country’s leading contract chipmaker, continues to expand production for Huawei despite lacking the advanced tools available to Taiwan Semiconductor Manufacturing Co. Meanwhile, shares of Moore Threads, a domestic AI accelerator designer, have soared more than 600 percent since its Shanghai debut, marking one of the biggest single-day IPO gains in mainland markets since 2019.
At the same time, Chinese regulators have urged companies to prioritize homegrown components, pressing agencies and firms to avoid Nvidia’s H20 chip designed specifically to comply with US export rules. Nvidia has said its share of China’s AI chip market has effectively fallen to zero. Beijing has also not yet signaled approval for the import of Nvidia’s more powerful H200 chips, even after Washington loosened restrictions.
Despite the massive state support, China still trails roughly six years behind the cutting-edge manufacturing capabilities dominated by TSMC, which continues to produce the most advanced processors for Nvidia and AMD. But with a potential $70 billion injection on the table, China is signaling that it intends to close that gap—no matter the cost.
