China’s semiconductor output shrank 17 per cent in July as supply chains remained under pressure from strict Covid-19 policies
- The production of integrated circuits (ICs) last month dropped 16.6 per cent year-on-year to 27.2 billion units
- The weakness in chip production is a further setback for China’s ambition to boost local semiconductor production
China’s semiconductor output suffered a steep fall in July after a brief rebound in previous months, as the country’s supply chain struggled to cope with strict Covid-19 control measures.
The production of integrated circuits (ICs) last month dropped 16.6 per cent year-on-year to 27.2 billion units, according to data released by the National Bureau of Statistics on Monday, reflecting disrupted production and oversupply of low-end semiconductor products.
The chips data came against a background of robust downstream production, with China’s automobile volume output in July surging 31.5 per cent from a year ago, with new-energy vehicle output more than doubling. Meanwhile, China’s output of smartphones fell 9.1 per cent in July to 89 million units, according to the statistics agency.
For the first seven months of 2022, China recorded a total output of 193.8 billion units for chip production, an 8 per cent decline from the same period last year, the official data showed.
The weakness in chip production is a further setback for China’s ambition to boost local semiconductor production and cut reliance on imported chips, which has been pressured further after the US passed policies to boost its own chip industry and considers more restrictions on Chinese companies.
China condemned the new US legislation, describing it as “a set of punches by Washington to ‘choke the throat of China’s development’”, according to The Global Times, a nationalist tabloid and official mouthpiece of the Chinese Communist Party.