China says it will continue focusing on achieving "major breakthroughs" in core technologies, such as high-end semi-conductors, or chips, and further enhance supervision.

With more policies like tax reliefs being launched to support the industry, more firms are jumping into the field, making the market more competitive and also in need of more supervision.

According to the National Development and Reform Commission (NDRC), China's burgeoning semiconductor industry raked in over 756 billion yuan ($113 billion) in sales last year, up 16 percent from the year before.

To enhance China's own clout in strategic and crucial technologies, over 12,000 new microchip companies have been established this year, bringing the total in China to 49,000. 

Municipal governments are gearing up to help. Shanghai, for example, is planning to establish more semi-conductor industrial parks. But since companies in the field need a lot of money and research time in the early stages, there are plenty of challenges ahead.

"AI and chip companies are not customer service companies, which can get a return in just two or three years. Some chipmakers listed on the STAR market have spent more than ten years on R&D, relying on support from the government. So it is very important to have enough professionals willing to spend time, and long-term investment. We don't need short-term investors who want to get a return in just two years," Claire Chen, co-founder and COO of Shanghai Clobotics Technology.

Chen also noted that the situation is improving and more domestic colleges are setting up semi-conductor related courses to train more professionals. In addition, demand for smart chips is growing in a variety of industries, like auto making and mobile phones. Experts warn, however, that new semiconductor firms need to clearly define their field of specialization.

"The road will not be very easy because domestic chipmakers always face troubles and challenges from big chipmakers. They have to choose different verticals. And if they try to fight with everyone, then probably they would lose out. They have to find out their narrow center of application where they can produce chips, customized for practical applications," Mukesh Sharma, general manager of Tech Mahindra in Shanghai.

The country's macro-economic planner early said that it will increase the supervision of the semiconductor industry to discourage investment from unqualified firms, while at the same time optimizing opportunities for the sector's growth and innovation, and for the strengthening of support industries. 

NDRC said it would be looking to banks, financial institutions, and investment funds to ensure they don't take on projects that require a high level of technological sophistication "blindly."