China's new semiconductor industry policy, which is expected to come out in the second half of this year, will offer more preferential policies for semiconductor enterprises.

The new policy stipulates that semiconductor enterprises will be exempt from paying income tax in the first five years of their incorporation and they only need to pay 50% of their prescribed income tax from the sixth year to the tenth year after they begin making a profit.

China's current policy states that semiconductor manufacturers who have operated for more than 10 years do not need to pay income tax in the first and second years after they begin to make a profit, but they need to pay half of the income tax from the third year to the fifth year.

A representative from the China Semiconductor Industry Association has told local media that the Chinese government will also start a special fund to support the industry. About US$12 million to US$25 million will be invested in the fund in the first year and the amount of investment will be increased in the future.