STATE-BACKED Chinese technology group Tsinghua Holdings plans to spend US$7.5 billion on research and development (R&D) over the next five years, accelerating China’s drive to build a high-value semiconductor industry to challenge global chipmaking rivals.

    As the firm that controls acquisitive chip supplier Tsinghua Unigroup outlined the target, its chairman, Xu Jinghong, also said China has been too slow to reform its economy, and must move faster to promote high-margin tech operations rather than cheap manufacturing.

    In the chip development drive — a strategic priority for the government — Tsinghua Unigroup aims to become the world’s No. 3 chipmaker after Intel Corp. and Samsung Electronics Co. The firm has proposed buying stakes worth nearly US$1 billion in two Taiwanese chip firms — deals now under review by a new Taipei government that is less friendly toward the Chinese mainland.

    Speaking to Reuters on the sidelines of a World Economic Forum gathering in Tianjin on Sunday, Xu said the pace of progress in China in broad economic terms was too slow. The old investment-led growth model produces diminishing returns and ever-larger amounts of debt, Xu said.

    Controlled by Tsinghua University in Beijing, Tsinghua says it operates on market principles but is still a State-owned behemoth: revenue topped 70 billion yuan (US$10.5 billion) last year.

    As well as pledging 50 billion yuan in research and development spending over the next five years, Tsinghua will set up a 10 billion yuan fund to support commercialization of new technology.

    Xu said Tsinghua had also kicked off a plan to open 1,000 startup incubation centers in 100 cities in China.

    China could add US$5.6 trillion to gross domestic product, and US$5.1 trillion of new income for households, by 2030, if it can switch to a productivity-led growth model, the McKinsey Global Institute said earlier this month.(SD-Agencies)