China has begun to implement its investment plans aiming to boost development of the local semiconductor industry, and will inject a total of CNY600 billion (US$19.4 billion) into the industry over the next five years, according to industry sources.

Almost 70% of the investment fund will be poured into the IC manufacturing and equipment sectors, with a focus on promoting locally produced logic chips, DRAM and NAND flash memory, said the sources. A group of logic chipmakers led by Semiconductor Manufacturing International (SMIC) has benefited from the first phase of investment, the sources observed.

The remaining part of the government-led investment fund will be for China's local IC design and backend sectors, the sources indicated.

China aims to have 50% of its domestic demand for semiconductors produced locally, the sources noted. The target percentage does not take into account chips made at the plants of foreign companies such as Samsung' NAND flash wafer plant in Xian and SK Hynix' DRAM fab in Wuxi. However, chips made at the joint-venture fab in which Taiwan's UMC has participated are considered locally produced products, the sources said.