China’s IC output grew 6.9% in 2023, defying weaker customer demand, tighter US sanctions

The country produced 351.4 billion ICs last year, compared with 324.2 billion in 2022, according to data published by China’s National Bureau of Statistics

SMIC’s total shipments of wafers from January to September 2023 declined by 24 per cent year on year, reflecting weaker demand from its main customers

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A semiconductor wafer foundry in Western Science City in southwest China’s Chongqing Municipality, Aug. 24, 2023. Photo: Xinhua

Published: 8:00pm, 17 Jan 2024

China’s total output of integrated circuits (ICs) in 2023 increased 6.9 per cent from a year earlier despite sluggish demand at one of its largest wafer foundries in the second half.

The country produced 351.4 billion ICs last year, compared with 324.2 billion in 2022, according to data published on Wednesday by China’s National Bureau of Statistics (NBS).

The NBS data counted a variety of chips to reach the total IC number, including logic, memory, analogue and special chips, plus sensors and chip modules.

In 2023, China’s semiconductor manufacturing industry was marred by factors such as weaker economic post-pandemic recovery, sluggish demand from smartphone and personal-computer makers, and tighter US-led sanctions that restricted its access to advanced technologies.

China’s top foundry Semiconductor Manufacturing International Corp (SMIC), which derived 84 per cent of its total revenue from the domestic market in the third quarter, saw its capacity utilisation rate fall to an average of 74 per cent in the first three quarters of last year, compared with 96 per cent in the same period the year before.

SMIC’s total shipments of wafers from January to September 2023 declined by 24 per cent year on year, reflecting weaker demand from its main customers in sectors spanning from smartphones to carmakers.