The IC And Software Industries Will Benefit And Related Stocks Are Moving Restlessly

Premier Li Keqiang presided over an executive meeting of the state council on May 8 to promote innovation and upgrading of state-level economic and technological development zones and create new heights of reform and opening up. We decided to continue the preferential policies for enterprise income tax on integrated circuits and software, and attract more investment from home and abroad to participate in and promote the development of the information industry. Relevant departments should promptly study and improve the supporting policies to promote the development of integrated circuit and software industry to a higher level.


Integrated circuits and software can be said to be the cornerstone of the current digital economy and information society. In China, there are indeed many shortcomings in these two fields, such as CPU, lithography machine and operating system. A number of industry analysts said it will take a long time to strengthen the weak spots. The decision of the state council's standing committee shows continuity of policies.


Signal 1: give the economic development zone greater autonomy in reform, and give priority to science and technology innovation policies

According to the website of the ministry of commerce, by the end of 2017, 219 state-level development zones had 18,000 high-tech enterprises, accounting for 13.8 percent of the country's total. It has more than 400 state-level incubators and crowd innovation Spaces. There are 57 patents per 10,000 people. Meanwhile, in 2017, the GDP of 219 state-level development zones reached 8.9 trillion yuan, up 9% year-on-year, accounting for 11% of the GDP. Total import and export volume and import and export volume of high-tech products increased by 12.9% and 10.1% respectively year-on-year.


The importance of national development zones is self-evident.


Signal 2: all kinds of ownership, including foreign investment, shall be treated equally, and the preferential policies for enterprise income tax of integrated circuits and software shall be continued

The meeting pointed out that by treating all kinds of owned-enterprises set up in China as equals, including foreign-funded enterprises, implementing preferential tax reduction and fee reduction, and attracting all kinds of investment to participate in and promote the development of integrated circuit and software industry, it is conducive to promoting the optimization and upgrading of economic structure and better meeting the needs of high-quality development and high-quality life. Meeting decided that in the integrated circuit manufacturing enterprises or projects implement enterprise income tax shall be separately according to the different conditions prescribed by the "two avoid 3 halve" (i.e., the first and second years, shall be exempted in the third to fifth years halving) or "five free five half" (that is, the first to fifth years, shall be exempted in the sixth year to the first ten years halving), on the basis of the integrated circuit design and software companies continue to implement in 2011 issued by the state council on further encourage the development of software industry and integrated circuit industry a number of policy notice "two avoid 3 halve" clear in the income tax preferential policies.


Signal 3: we should promptly study and improve the supporting policies to promote industrial development in the next step

Integrated circuit and software industry are strategic, basic and leading industries supporting economic and social development, and their development also needs high investment and long-term persistence.


The semiconductor sector has started to pick up pace

The semiconductor index rose as much as 5.25 percent in intraday trading, leading other sectors, before closing up 2.34 percent, according to data from dongcai choice. Of the 37 semiconductor concept stocks, 31 closed higher.