China-Taiwan IC Free-Trade Zone Established in Xiamen, Fujian

On July 29, the Xiamen Department of Science and Technology announced the establishment of a China-Taiwan Cross Strait Integrated Circuit Free-Trade Industry Zone, hailing the new zone as China's future "Silicon Valley." The zone, which will be based in the Huli district of Xiamen, is squarely located within the boundaries of the Fujian Province Free-Trade Zone, one of three new Pilot Free-Trade Zones that were announced in December 2014.

According to an official report on the Xiamen Integrated Circuit Center website, the China-Taiwan IC Zone will have funding from and be operated by two local state-owned enterprises under the Xiamen and Huli respective Departments of Science and Technology. The zone will feature an IC design R&D center, a bilateral nanotechnology research center, and an IC duty-free product exchange center. 

According to the announcement, in addition to being eligible for existing Free-Trade Zone benefits, companies that establish themselves in the zone will benefit from:

• three years of reduced taxes
• 70 percent subsidy on processing cost of on all new chips that go into production, especially multi-project wafers (MPW), with a cap of 1.5 million RMB/year
• 45,000-60,000 RMB bonus/year for new, high-level employees for first three years in zone; and up to 100,000 RMB to new companies that bring high-level human capital to the zone
• grants of 9,000 RMB for all new college graduate employees that they hire

The announcement also stated that the Xiamen government will soon follow up with relevant financial and IP policies to further support the zone.