Research On The Impact Of Government Subsidies To China’s Semiconductor Enterprises’ Financial Performance

With the increasing demand for semiconductors,the importance of semiconductor industry has become increasingly prominent,however,the semiconductor industry in China which is facing technological encircle and sanctions from the West in the current international environment of severe competition pattern is struggling at the moment.China’s semiconductor enterprises can not overcome the disadvantage of backwardness and complete the technological catch-up and the breakthrough in enterprise development.In order to guide,support and develop the semiconductor industry,China has issued a series of support policies related to semiconductor to fully support the development of China’s semiconductor enterprises.Government subsidy has become an important driving force and support to promote the development of semiconductor enterprises.Although semiconductor enterprises are thriving under the current support policies and subsidies,there are also possibilities of subsidy fraud and abuse of policies in the industry.The scale of government subsidies for semiconductor enterprises is relatively large,which is occupying a large amount of national resources and funds.However,such a large amount of government subsidies will directly affect the current profit and loss,and then affect the financial performance of enterprises,which will undoubtedly lead to external information users can not really understand the real development trend and financial status of enterprises,and with the gradual reduction of government subsidies,It remains to be seen whether semiconductor companies can develop independently on their own.Therefore,it is of great significance to study the influence of government subsidies on the financial performance of semiconductor enterprises to guide the development of semiconductor enterprises and improve the efficiency of government subsidies.This paper summarizes the theories and research results related to government subsidies and corporate financial performance,and develops an overall research framework for the research topic,including introducing the logical framework of financial analysis,studying the mechanism of government subsidies on the financial performance of semiconductor enterprises,and elaborating the analysis method of the impact of government subsidies on the financial performance of semiconductor enterprises.It introduces the characteristics of government subsidies of semiconductor enterprises and the impact of government subsidies on cash flow and profit of semiconductor enterprises.Finally,it focuses on case analysis whose case study object is SUGON.By comparing the financial indicators and the financial indicators excluding the impact of government subsidies,the impact of government subsidies on the profitability,debt paying ability,development ability and business ability of SUGON this paper are respectively analyzed.Then,the coefficient of variation method is adopted to select 20 semiconductor enterprises and construct the comprehensive performance evaluation model of SUGON according to the characteristics of semiconductor industry,and analyze the influence of government subsidies on the comprehensive performance of SUGON.Through research and analysis,it is found that government subsidies can indeed temporarily improve the financial performance of SUGON,but this will cover up the real financial situation of SUGON,and does not fundamentally promote the stable development of the enterprise.According to the established research logical framework,the government subsidies and financial data of SUGON from 2016 to 2021 are combed and analyzed.Based on the above research,the conclusion about the impact of government subsidies on the financial performance of SUGON Is drawn and suggestions which are about semiconductor enterprises to improve the use efficiency of government subsidies and operational development planning and government departments to improve the allocation of national resources and improve the relevant system of government subsidies are put forward.