China is considering a stimulus package that could amount to $70 billion to finance and support its semiconductor industry, in a move that would see it pump more state funds into a sector it sees as crucial in its technology battle with the United States. Officials are studying proposals to award a package of subsidies and other forms of financial support ranging from 200 billion yuan (about $28 billion) to 500 billion yuan, according to people familiar with the matter who requested anonymity, adding that the final details of these incentives, including the exact value of the amounts, are being worked out and the companies still being targeted. Unprecedented Incentives The scale of this effort, which is minimally close to the level of funding allocated by Washington for the US Chip Act, reflects Beijing’s determination to reduce its dependence on foreign chip companies such as NVIDIA. It also indicates that the government will continue to support companies such as Huawei Technologies and Cambricon Technologies, even after the administration of US President Donald Trump approved the sale of NVIDIA chips to China, including the more powerful H200 model. Also read: Report: Huawei and SMIC advance in chip manufacturing technology despite US restrictions. If the proposed maximum funding is approved, the program would represent the largest government stimulus initiative for the semiconductor sector ever, at a time when countries from Europe to the Middle East are seeking to ensure local production and the availability of basic components for artificial intelligence and national security. People familiar with the matter explained that the Chinese program will operate separately from existing government financing plans, such as the $50 billion equity investment vehicle, Big Fund III. Representatives of the Ministry of Industry and Information Technology, which oversees the fund and helps manage support measures, did not respond to a faxed request for comment. China’s strategy: ‘The whole nation’ China’s injection of vast resources into the world’s largest semiconductor arena comes at a geopolitically sensitive time. Chinese President Xi Jinping has pledged to strengthen his country’s semiconductor capabilities through a “whole nation” approach, leveraging all state resources. Beijing is worried about the uncertainty over access to US technology, in light of successive restrictions on exports imposed by three US administrations, starting with Trump’s first term. This trend has been embodied in various ways over the years. With Beijing prioritizing the development of semiconductors and artificial intelligence, companies across the supply chain have seen their situations improve significantly. Chinese companies favor Semiconductor Manufacturing International Corporation, China’s largest contract chipmaker, is expanding its capabilities as Huawei’s main partner, despite lacking the advanced equipment needed to produce the most advanced chips. Also read: Nvidia’s campaign to block a law restricting chip exports to China is paying off. At the same time, shares of Moore Threads Technology, which is designed for artificial intelligence accelerators, have risen more than 600% since its listing on the Shanghai Stock Exchange. Restrictions on “Nvidia” Chinese officials also asked companies to give preference to the adoption of local components, as the authorities urged companies and local entities to avoid using the “H20” chip from “Nvidia”, which is a less powerful version designed specifically for the Chinese market to meet US controls. Nvidia executives said the company’s share of the artificial intelligence chip market in China had dropped to zero. So far, Beijing has not publicly agreed to allow the import of H200 products from NVIDIA, despite the recent change in US policy. Read more: Trump allows Nvidia to sell advanced artificial intelligence chips to China However, Chinese technology is still about six years behind the latest advanced manufacturing operations controlled by Taiwan Semiconductor Manufacturing Company (TSMC), the main supplier to Nvidia and Advanced Micro Devices.