China-based tablet SoC specialist Allwinner Technology has reportedly been selected as one of the target companies able to gain financial support from the central government, which has set up a national industry investment fund focusing on investing in the construction of advanced process capacity, semiconductor firm reorganization, and mergers.

Allwinner will use investment funds from the government to make itself more competitive, and contribute effectively to growth of the local IC industry and the self-sufficiency rate of ICs in China, said the sources.

With government support, Allwinner will also make strategic acquisitions locally and internationally, the sources indicated. Allwinner is likely to first merge with fellow company Rockchip Electronics to form a new, state-owned entity, which will gear up to tackle the market for IoT and wearable devices, the sources said.

Spreadtrum Communications was the first investment target chosen by the China government in the IC design industry. Spreadtrum is about to merge with RDA Microelectronics to establish a leading China-based SoC provider for smartphones as well as TVs, the sources noted.