China chip imports fall 12.4% in midst of US tech trade war

Chip imports from China have dropped by more than 12% in September, due in part to chip shortages and intense trade tensions with the United States.

New data from the Chinese Government revealed a total of 47.6 billion chip units were imported in September 2022, compared with 54.3 billion the same time last year, marking a steep decline for China – the world’s largest importer of chips.

The data, delayed as a result of the Communist Party Congress, follows a long-term downward trajectory of chip imports. China imported 417.1 billion chip units in the first nine months of 2022, representing a year-on-year fall of 12.8%.

With the US making efforts to develop its own semiconductor ecosystem, coupled with a global chip shortage, caused a surge of imports to China itself, as many companies in the country moved to stockpile supplies.

Domestic output in China also fell by 16.4% this September to 26.1 billion units. These declines are likely to continue as a result of the Biden administration’s sanctions and export controls announced in October.

These sanctions have caused many firms to cease the supply of chip manufacturing equipment to key Chinese chip companies like Yangtze memory Technologies Co (YMTC) and Semiconductor Manufacturing International Corp (SMIC).

In response, China is pushing forward with its Made in China 2025 strategy to establish a strong chip industry and achieve self-sufficiency. While Chinese firms may struggle in the short term to access chips to develop innovative technologies and devices, China will seek to increase their focus on building domestic production and technologies in the long term.