China tightens chip-design protection and clarifies rights to spur innovation

China has revised regulations on chip design protection, a crucial step towards boosting tech self-sufficiency amid US export controls. Premier Li Qiang signed a decree to implement the amended rules on the protection of integrated circuit layouts, effective from October 15. These revisions outline penalties for infringement and clarify licensing, transfer, and co-ownership rights, aiming to expedite the commercialization of innovative chip designs.

Chip design acts as the foundational blueprint for the entire semiconductor industry. Despite domestic chip manufacturing being hindered by US restrictions on advanced equipment imports, mastering chip design allows Chinese companies to overcome obstacles through custom architectures, such as the hardware-software co-design strategy pursued by Huawei Technologies.

This legal update arrives as Beijing intensifies its pursuit of tech self-reliance under the 15th five-year plan, released in March. The plan emphasizes refining mature-node processes, enhancing capabilities in advanced process technologies, accelerating the development of key equipment, materials, and components, and advancing high-performance processors and high-density memory.

These efforts, combined with energy infrastructure, computing power, and AI initiatives, outline a comprehensive strategy across the AI ecosystem, from infrastructure and software to applications and governance. Premier Li has been a key figure in this strategy, advocating for semiconductors to become a cornerstone of China's emerging industries.

He has visited semiconductor and tech start-ups, including leading memory chipmaker Yangtze Memory Technologies Corp, chip equipment manufacturer Naura Technology Group, and chip design tool provider Semitronix, encouraging them to accelerate core technology development and pledging increased government support for industrial innovation.