China’s semiconductor industry is being forced to function in the face of tougher sanctions, so the fall in imports of core components to China this year may not only highlight the local economy’s slow recovery from the pandemic. In the seven months of this year, the import volume of integrated circuits fell by 16.8% to 270.2 billion items compared to the same period last year.
This publication reports South China tomorrow post referring to the latest Chinese customs statistics. The dynamics of changes in imports in this direction is somewhat encouraging, as the decline has slowed since the beginning of the current year. In the first three months, imports of integrated circuits to China fell by 22.9%, according to the results of the first half of the year, the decline was 18.5%. On the other hand, the import volume of integrated circuits rose 2.6% qoq to 42.4 billion units in July.
Against the background of a decrease in imports of semiconductor products, domestic production in China is growing. In April, volumes went from a decline to an increase for the first time in the previous 16 months, and by the end of June, integrated circuit production grew 5.7% year-on-year to 32.2 billion pieces. In terms of value, the total volume of imports of all kinds of semiconductor components in China fell by 21.6% to US$191.3 billion in the first seven months of this year. Over time it fell by only 7.6%.
According to geographic directions, changes in import dynamics can only be assessed for all commodity categories as a whole. South Korea has reduced product shipments to China by 24.7% year-on-year for seven months this year. Apparently, the import volume of Korean memory chips has decreased as the US authorities tried to put pressure on local suppliers after the Chinese authorities imposed sanctions on Micron Technology. Taiwan was the second largest drop in Chinese imports in this regard, the drop reaching 22.8%. Japan has been able to demonstrate a steady 40% increase in imports in June under the conditions of restrictions on the supply of certain types of lithography equipment to China, which were expected and passed at the end of July, but it is evident that this has been the case after the fulfillment of these orders a decrease due to new sanctions.
Physical exports of integrated circuits from China fell 8.3% to 151.7 billion pieces in the January-July period, while exports of all types of semiconductor products from China fell 17.2% in value terms.