The global chip market has seen a shortage turn into a glut since late last year, and China continues to be pressured by US sanctions on the export of advanced chips and chip-making equipment to the country, as the US-initiated Chip 4 Alliance – which includes South Korea, Japan and Taiwan – comes into shape.

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China’s total imports from South Korea tumbled 27.7 per cent in the first four months, in the steepest drop among China’s major trade partners, according to Chinese customs data. Imports from Japan and Taiwan dropped 18.5 per cent and 27.5 per cent, respectively, according to the customs data on Tuesday. In comparison, China’s overall imports dropped 7.3 per cent.

Meanwhile, Taiwan shipped US$151 million worth of chip-making machines to the mainland and Hong Kong in April – a 26 per cent drop from a year earlier, according to figures from the Ministry of Finance in Taipei released on Wednesday.

According to Chinese customs data for the first quarter, chip-related imports from major semiconductor manufacturers slumped compared with the same period last year. China imported IC with a total value of US$14.6 billion and US$30.6 billion from South Korea and Taiwan respectively in the first three months, a fall of 35.1 per cent and 23.6 per cent year-on-year.

For machines that are used to manufacture wafers, semiconductor devices, integrated circuits or tablet monitors – a separate category – import declines in terms of value ranged from 16 per cent to 50 per cent for South Korea, Japan and Taiwan, over the quarter.

Meanwhile, the global semiconductor market remains in the doldrums.

Worldwide sales of semiconductors totalled US$119.5 billion during the first quarter, down 21.3 per cent from same period last year, according to data from the US-based Semiconductor Industry Association. The memory market, one of the hardest-hit sectors, is expected to see revenue slump by 35.5 per cent year-on-year to US$92.3 billion this year, because of an “overcapacity of chips and excess inventory”, according to tech research firm Gartner.

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Taiwan pledged last October that it would follow the export controls issued by the US, and Japan reportedly reached a joint agreement with the US and the Netherlands in January to coordinate on export controls to China covering certain chip-making equipment. Beijing has lodged a complaint against these moves at the World Trade Organization, calling them a violation of international economic and trade rules.

South Korea has yet to formally announce any restrictions on exports of chips and chip-making equipment to China. However, Washington has asked Seoul to press South Korean memory chip makers not to fill any market gap in China if Beijing ends up banning sales of Micron Technology products on the mainland, the Financial Times reported, after Chinese authorities launched a national security probe into the US company in March.

Last October, the US granted Samsung Electronics and SK Hynix a one-year waiver from its sweeping export controls that limited chip makers from supplying their China facilities with advanced technology. The waiver, which is due to expire this October, is expected to be extended “for a considerable period of time”, South Korean trade minister Lee Chang-yang said on Tuesday, according to a Bloomberg news report.