Chipmakers such as Semiconductor Manufacturing International (SMIC), Hua Hong Semiconductor and Huawei, as well as equipment suppliers like Naura and Advanced Micro-Fabrication Equipment Inc China might benefit from the policy, the report added citing people familiar with the matter.

Reuters had reported in December that China is working on a more than 1 trillion yuan ($145.34 billion) support package for its semiconductor industry, amid tightening U.S. restrictions aimed at slowing its technological advances.

The chosen firms will have access to additional government funding without having to achieve previously necessary performance goals, the report said, adding that they will also be allowed to play a bigger role in state-sponsored research projects.

($1 = 6.8803 Chinese yuan renminbi)

(Reporting by Kanjyik Ghosh in Bengaluru; Editing by Muralikumar Anantharaman)