Finally managed to book a room! Hotels near a major semiconductor manufacturer are fully booked.
When Xiao Wu, an investment promotion officer from the Yangtze River Delta region, mentioned this, his pupils dilated slightly, and a glimmer of anticipation flashed in his eyes.
Just how hot is the semiconductor investment race?
Queuing from morning till night to meet with companies—this is a microcosm of local governments’ fierce competition to boost the economy and attract investment.
From another perspective, attracting investment in the semiconductor sector is becoming increasingly difficult, and the challenges facing local governments are growing.

01

Discussing Projects, Yet No Follow-Up
The battle for investment among local governments has reached a fever pitch, with the semiconductor sector being the most intense.
It seems that ever since Hefei was “held up as a model,” many other regions have followed the trend of industrial development by building specialized industrial parks and attracting related enterprises.
Essentially, they’ve made the boldest commitments and taken on the toughest tasks. Their investment efforts fully demonstrate a tenacity that embraces challenges and pushes forward despite difficulties.
From an industrial perspective, the semiconductor sector will inevitably undergo a process of survival of the fittest, but to some extent, this will create a clustering effect in core regions.
Overall, this is a positive development, as it can pool national resources to boost the growth of the semiconductor industry.
Since internal cultivation alone is insufficient, the focus is more on attracting mature projects from outside. Most semiconductor industry clusters are located in regions such as the Yangtze River Delta, the Pearl River Delta, and the Chengdu-Chongqing area. Consequently, local governments are actively reaching out to attract these projects.
It must be said that investment promotion officials from various regions are constantly on the go, busy with recruitment efforts, and even struggle to book hotels near major semiconductor manufacturers.
They must secure valuable projects while avoiding various pitfalls and enduring the psychological strain of project partners making exorbitant demands—the difficulty is self-evident.
From a corporate perspective, when a company is already located in an industrial cluster—where markets, talent, and industrial synergy are readily available—why would it choose to relocate to a completely new environment?
In the context of investment promotion, many semiconductor projects are discussed but never materialize.
Generally speaking, the types of projects government-run industrial parks seek are growing semiconductor companies that have already achieved industrialization, have a certain level of output value, have well-known partner clients, and do not have high demands for policies or funding.
For early-stage semiconductor projects, provided they lack capital and do not have a core team comprised of well-known figures, they can apply for local startup programs to secure funding support. Simply put, this is a pathway for companies to obtain early-stage capital without the government taking an equity stake.
However, the reality is that not all government-run industrial parks interested in the semiconductor sector have industrial funds, nor can all industrial funds invest in semiconductor projects as scheduled.
At present, a collaboration between capital and the government appears to be the optimal approach for semiconductor projects to get off the ground. Of course, this should be evaluated on a case-by-case basis depending on the specific circumstances of the enterprise.

02

In-Depth Planning and Strategic Investment Promotion
Local efforts to attract semiconductor projects represent an industrial competition among regions. In the long run, this is highly beneficial for improving the business environment and fostering industrial clustering.
At this stage, the focus should not be on launching large-scale projects, but rather on in-depth planning and strategic repositioning.
From the perspective of supply chain-based investment promotion, focusing on listed companies means targeting the leading enterprises within the supply chain.If we liken the enterprises within an industry to a tangled ball of yarn, then listed companies are the threads that untangle it.
The semiconductor industry chain is heavily concentrated on the STAR Market, encompassing 147 listed companies across five major sectors: semiconductor materials, discrete semiconductor devices, integrated circuits, electronic components, and others.
These specific segments are precisely the key areas where regions are competing to attract investment and strategically position their development. Specifically:

• Grasp market demand and roll out investment promotion policies.

Based on an understanding of end-market demand, seize opportunities presented by shifts in market trends to promptly introduce clear investment attraction policies and gain a competitive edge in attracting investment.

• Understanding industry trends to ensure professional project attraction.
• Whether initiating projects or attracting investment, play your trump card from the start by partnering with local end-market enterprises to drive efforts at a deeper level—addressing market demand and supply chain integration.
• Attracting leading enterprises and launching "targeted investment campaigns."
• Leading enterprises typically possess strong market competitiveness; as they expand and upgrade their operations, related supporting enterprises can also grow.
• Attract enterprises that fill gaps in the industrial chain and conduct targeted investment promotion.
• The semiconductor industry benefits from economies of scale; the higher the level of industrial integration, the better the supporting infrastructure, the lower the costs, the higher the efficiency, and the stronger the competitiveness.
• Recruit leading talent with broad influence.

• Such talent not only fosters strong cohesion within the industry but also ensures the success of projects. Core talent with access to industrial resources is key to the development of the semiconductor industry. As various competitive regions aggressively pursue talent, improving local service levels and effectively supporting local industry leaders remains a daunting task; retaining existing talent is itself a victory. Otherwise, it becomes a situation where you book a hotel to poach my top talent, while I go to your region to recruit your existing workforce.In some places, new companies fail to attract talent, only to return home and find that their own employees have been poached. Ultimately, the old ones leave, and the new ones don’t come.
  

03

Market Principles and Fair Competition
Recently, while chatting with someone from the semiconductor industry, he shared an example.
He noted that during the Spring and Autumn and Warring States periods, every state built its own Great Wall—a cycle of mutual defense where “you defend against me, and I defend against you.” It wasn’t until Emperor Qin Shi Huang unified the country that he connected the Great Walls along the northern border, creating a true defense against external enemies.
Using this analogy, we must stop internal, low-level duplication and cease project-driven initiatives aimed solely at short-term gains. What is needed instead is to concentrate efforts on unified planning and deployment.
In wartime, this could be called a rectification campaign or the “Three Anti- and Five Anti” campaigns.
In fact, the sooner we put a stop to this, the better, because many current projects are merely “money chasing money”—they’ve secured land and erected factory frameworks but haven’t yet begun burning through funds in earnest. Even if the purchased equipment is slightly outdated, it can still be put to use if refurbished.
If we continue to deceive people, we’ll end up with a pile of facilities that can’t produce anything—or worse, don’t even meet cleanliness standards.
However, many have also noticed that in regions with more developed economies, investment promotion efforts have become increasingly professional and meticulous. The days of using PowerPoint presentations to scam land and funds are now unlikely to return.
Given the current trend of regulatory consolidation, the National Development and Reform Commission (NDRC), the Ministry of Industry and Information Technology (MIIT), and the Ministry of Science and Technology (MOST) will likely wield greater influence over the future advancement of the semiconductor chip industry, while the likelihood of local governments acting independently may decrease.
Chip projects may still return to market-oriented operations, respecting market principles.
The state has invested heavily in the semiconductor chip sector, but it needs to identify those who are down-to-earth in product development and R&D. In this process, the importance of respecting market principles must be emphasized; even with strong government support, market principles must be respected.