Advertisement
Semiconductors
TechTech Trends

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

Reading Time:2 minutes
Why you can trust SCMP
2
China’s chip output dropped in July. Photo: Shutterstock
Iris Deng

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 July performance ended the brief rebound seen in May and June, when China reported 27.5 billion and 28.8 billion units respectively. It was slightly higher than this year’s low point of 25.9 billion units in April when Covid lockdowns and travel restrictions disrupted manufacturing activities in the Yangtze River Delta, home to Shanghai and a major chip production base.

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.

China’s overall industrial production failed to meet expectations in July with 3.8 per cent growth year on year, down slightly from 3.9 per cent growth in June, according to the statistics bureau on Monday, amid ongoing impact from strict Covid-19 policies.

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.

Advertisement