China has revised its regulations protecting integrated-circuit layout designs, significantly tightening registration standards and enabling punitive damages for serious infringement cases [1, 2, 3]. The new rules were signed by Chinese Premier Li Qiang on July 23, 2026 [1, 2, 3], and will go into effect on October 15, 2026 [1, 2, 3].
The updated regulations cover detailed layouts that determine chip component arrangements, which represent substantial engineering work central to semiconductor development across the industry, including for manufacturers not directly producing chips [1, 3]. Prospective applicants must now demonstrate genuine creative activity, submit originality declarations, and clearly identify original elements in their registration filings [1, 3]. Regulators can reject applications that fail to meet these stricter requirements and can challenge improper registrations [1, 3].
Damages for layout design infringement can be calculated based on actual losses or gains, with courts authorized to award punitive damages in the most serious cases [1]. The regulations also clarify licensing, transfer, and collateral use of layout design rights. They require organizations to provide reasonable protections to eligible personnel involved in developing layout designs [1].
China's semiconductor industry is accelerating efforts to build domestic alternatives after US restrictions on advanced chip design software and manufacturing equipment [1, 3]. Policymakers have considered broader measures to prevent strategic technologies from being transferred overseas or acquired by foreign entities, including possible restrictions on overseas production of advanced chips based on Chinese designs [1, 3].
The revised rules aim to spur innovation and improve resilience across China’s semiconductor and artificial intelligence ecosystems by sharpening penalties and expanding rights [2]. Mastering chip design is a key part of the strategy, enabling firms to create custom architectures to work around manufacturing bottlenecks, exemplified by Huawei’s hardware-software co-design efforts [2].
China plans to refine mature-node processes, enhance advanced process technologies, accelerate development of key equipment, materials, and components, and advance high-performance processors and high-density memory chips [2]. Alfredo Montufar-Helu noted China is "trying to screen out low-quality claims and distinguish companies with genuine technological capability" by "raising originality standards, tightening registration requirements and penalising bad-faith applications" [3].
Following Premier Li Qiang’s signing on July 23 and the publication of regulatory details by the Justice Ministry and National Intellectual Property Administration on August 3, the new regulations will officially take effect on October 15, marking a new phase in protecting chip design innovation in China [1, 3].
