China’s chip imports shrank 13 per cent from January to September as US ratchets up pressure in tech war
- China’s semiconductor imports fell 12.8 per cent to 417.1 billion units in the first nine months of the year, Chinese customs data showed
- Production of locally made chips plunged 16.4 per cent in September to 26.1 billion units, National Bureau of Statistics figures showed
China’s chip imports shrank nearly 13 per cent in the first nine months, according to Chinese customs data, as the world’s biggest market for semiconductors grapples with an escalating tech war with the US.
China imported a total of 417.1 billion of integrated circuits (IC) from January to September, down 12.8 per cent from 478.3 billion units in the same period last year, according to data from the General Administration of Customs on Monday. The decline matched the 12.8 per cent drop in the year’s first eight months and the steepest slump in 2022.
The reduced volume is a sharp contrast to the first nine months of 2021, when imports rose 23.7 per cent.
However, the value of chip imports increased 1.5 per cent year on year to US$316.9 billion from January to September, meaning China is purchasing chips at higher prices.
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Separately, data from the National Bureau of Statistics released on Monday showed that domestic chip output plunged 16.4 per cent in September to 26.1 billion units. In the first nine months of 2022, total output fell 10.8 per cent to 245 billion units.
The import and domestic output figures, originally scheduled to be released on October 14 and 18, respectively, were delayed due to the Chinese Communist Party congress. The government did not give a reason for the delay. China concluded its week-long 20th party congress on Saturday.
China is the world’s largest importer of chips, which are used in a range of applications from producing electric vehicles to smartphones and other consumer electronics. Semiconductor imports in China started to shrink in the first two months of 2022, which marked the first year-on-year drop since the beginning of 2020, according to official customs data.
The drop in trade data comes amid a contraction in manufacturing activity on the mainland. The Caixin/Markit manufacturing purchasing managers’ index (PMI) fell to 48.1 in September from 49.5 in August, a second straight monthly decline. However, the country’s official manufacturing PMI beat expectations and rose to 50.1 in September, up from 49.4 in August, marking the first rise in three months.
In September, semiconductor imports rebounded slightly to 47.6 billion units from 44.9 billion in August, ending two months of declines.
Meanwhile, the volume of China’s chip exports from January to September dropped 10 per cent year on year to 209.7 billion units, while their value increased 7.3 per cent in the same period.
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The weakening trade data also highlighted the mounting pressure Beijing faces from the US in its quest for semiconductor self-sufficiency. Washington has significantly escalated efforts to undermine China’s advanced semiconductor manufacturing industry in the past two months, with a series of measures to restrict the access of Chinese chip-makers to advanced technologies, equipment and services from the US.
At the end of August, the US Department of Commerce banned Nvidia and Advanced Micro Devices, the two major graphics processing unit providers in the world, from selling their most advanced chips to China.
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Last week, the Bureau of Industry and Security, an agency under the US Commerce Department, updated to its export controls targeting Chinese chip-makers, adding new licensing requirements for items and personnel which are set up to support the production of logic chips and memory chips at China-located foundries.
Meanwhile, the agency also added China’s top memory chip maker Yangtze Memory Technologies Co (YMTC) and 30 other semiconductor-related mainland companies on an “unverified list”, making them ineligible to receive items subject to the US government’s export regulations.
Despite Beijing’s response to denounce US export controls by calling them “technological hegemony”, top chip-making tool providers in the world, including ASML Holdings, Lam Research and KLA Corp, earlier this month started to pull their US engineers out of Chinese clients including YMTC, according to media reports.
