China’s import volume of integrated circuit (ICs) decreased nearly 11 per cent in the first five months of the year, according to official customs data released on Thursday, amid disruptions in manufacturing and logistics operations owing to rigid Covid-19 control measures in the world’s biggest market for semiconductors . The country imported 232 billion IC units from January to May, down 10.9 per cent from 260 billion units shipped in the same period last year, data from the General Administration of Customs shows. That was in sharp contrast from the 30 per cent surge in chip imports recorded in the first five months of 2021. The total cost of chip imports in the first five months of this year reached US$174.4 billion, a 9 per cent jump from a year earlier, as the global semiconductor shortage continued to push up prices across the industry. That would imply an average unit price increase of 23 per cent for imported chips, according to the South China Morning Post ’s calculation based on customs data. Still, the country’s year-on-year decline in semiconductor imports, which started in the first two months of this year , eased in May. China-based companies imported 45.9 billion IC units that month, up from 45.7 billion units in April. While the official chip import figures did not include a breakdown by IC type, they help paint a general picture of domestic demand amid China’s faltering economy . China’s zero-tolerance approach to Covid-19 infections, which enforced lockdowns on major cities like Shanghai and even entire regions, slowed down economic activity and caused “a chain reaction across the global economy due to the country’s closed factories and rising logistics costs ”, according to a report by Counterpoint Research that was published earlier this month. China’s economy showed an initial improvement in May, as coronavirus cases dropped and restrictions eased. But manufacturing activity remained in contraction , according to official data. The manufacturing purchasing managers’ index (PMI) in May rose to 49.6 , up from 47.4 in April , according to the National Bureau of Statistics. Still, a PMI reading below 50 indicates contraction, while a reading above that mark indicates production expansion. China’s chip output shrinks as Covid-19 lockdowns paralyse industries Shanghai formally lifted its lockdown on June 1, allowing all manufacturers to resume production and try to make up ground they lost to the pandemic. The volume of Chinese IC exports, for example, fell 7.8 per cent year on year to 116.5 billion units in the first five months of this year. The value of these exports rose 17.5 per cent in the same period, following a trend caused by the global chip shortage. Total car sales in China were expected to record a 13.11 per cent year-on-year drop to 9.45 million units in the January-to-May period, according to data from the China Association of Automobile Manufacturers. China has been the world’s largest importer of chips for years, as many large-scale manufacturers of cars, home appliances, personal computers, smartphones and other consumer electronics are located across the mainland. China’s top chip maker SMIC warns of reduced electronics demand in Q2 Worldwide semiconductor revenue is expected to reach US$661 billion this year, a 13.7 per cent increase from US$582 billion in 2021, on the back of continued resilience in demand across the cloud, network infrastructure and automotive markets, according to the latest industry forecast by research firm International Data Corp (IDC). “The global nature of the semiconductor industry has been challenged by Covid-19” and continues to be affected by regional shutdowns, Nina Turner, IDC’s research manager for semiconductors, said in the report. “But we reiterate our outlook for a positive growth year for 2022.” China’s economy could moderately recover in the second half, according to IDC, on the back of Shanghai easing restrictions and the government’s new stimulus plan .