China’s imports of semiconductors shrink as the country pursues tech self-reliance

Integrated circuits imports by China decreased 9.6 percent in volume in the first quarter from a year ago, representing a sharp decline compared to the year-on-year increase of 33.6 percent in the same period in 2021.

China’s customs data showed that the value of IC units China bought in the first quarter of this year was higher than the same period last year. The country spent US$107.2 billion in total for 140.3 billion IC units, up 14.6 percent year on year.

However, the data did not specify the volume of each IC type China bought.

China continuously broke historical records of monthly ICs production volume in 2021, the country produced 359.4 billion ICs in 2021, up 33.3 per cent year on year, according to data released by China’s National Bureau of Statistics.

However, the country’s imports of ICs is still larger than the output. China imported 432.5 billion ICs in 2021.

China is the world’s largest importer of chips, which are used for manufacturing electric vehicles, smartphones and other consumer electronics.

The reduction in import volume came against the backdrop that China’s aggressive push towards self-sufficiency in bid to reduce reliance on foreign chips.

Meanwhile, China’s resurgence of coronavirus infections has hit major cities like Shanghai and Guangzhou that are centers of consumer spending and cross-border supply chain.

Shanghai has been under lockdown after Covid cases hit a new high.

Apple’s supply chain is battling a new covid outbreak with city lockdowns.

Pegatron, a contract manufacturer for Apple, said on Tuesday it has paused production in two factories in Shanghai and nearby manufacturing hub Kunshan to follow the local government’s goal of suppressing pandemic as quickly as possible, and the resumption date will depend on the local government.

Kunshan, a manufacturing hub where many electronics makers are based, is home to Apple suppliers Foxconn Technology Group.

In 2021, China is the world’s largest semiconductor manufacturing equipment market, with sales increasing by 58 per cent to US$29.6 billion, according to a report released by SEMI.

US-based Semiconductor Industry Association (SIA) forecasted in its latest report that if China’s semiconductor industry maintains its current growth momentum, it could account for 17.4 percent of global sale by 2024.

China’s largest chipmaker Semiconductor Manufacturing International Corp, said its capital expenditure this year will be about US$5 billion with focus on capacity expansion and R&D, increasing from last year’s US$4.5 billion.