China's SMIC, chip sector boost R&D spending despite weak earnings

Beijing plans $40bn fund to bolster domestic semiconductor supply chain

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Shanghai-based SMIC increased R&D spending in the first half despite a 52% drop in net profit. (Photo by Shunsuke Tabeta)

SHUNSUKE TABETA, Nikkei staff writer

BEIJING -- Chinese semiconductor manufacturers are stepping up R&D investment despite deteriorating earnings, as Beijing looks to establish a domestic chip supply chain with the help of a new 300 billion yuan ($40.9 billion) fund.

Earnings declined for over 70% of the 146 listed Chinese semiconductor companies in the January-June period, yet nearly 80% increased investment.

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