China’s Chip Imports Drop 21% in January to April on US Export Ban, Self-Reliance Push
Li Na | Fan Xuehan
DATE:  May 29 2023
/ SOURCE:  Yicai
China’s Chip Imports Drop 21% in January to April on US Export Ban, Self-Reliance Push China’s Chip Imports Drop 21% in January to April on US Export Ban, Self-Reliance Push

(Yicai Global) May 29 -- China’s imports of semiconductors fell 21 percent in the first four months of the year, impacted by US export restrictions and stepped up efforts toward self-reliance, according to the latest official data.

China imported 146.8 billion microchips from January through April, figures from the General Administration of Customs showed. Their value fell 26 percent to USD105.6 billion.

On Oct. 7, the United States enforced new rules to restrict China from accessing advanced computing chips, developing and maintaining supercomputers, and making advanced semiconductors. Companies using US-made tools and components were also prohibited from selling high-performance chips to China. 

“The US government adopted end-use controls against China's semiconductor manufacturing industry in the regulation act it enacted, including bans of exports of any goods restricted by the Export Administration Regulations to entities in Chinese territory that make chips of a specific performance specification," Zhao Xiaoma, a partner at China Insights Consultancy, told Yicai Global.

“Even chips for NAND flash memory and dynamic random-access memory are restricted, which causes short-term pain to some extent,” Zhao said. “External restrictions force Chinese semiconductor suppliers to accelerate the realization of home-made products.”

China has shifted development to make more conventional chips to meet the needs of carmakers and white goods manufacturers. Chipmakers Loongson and Phytium Technology have introduced various central processing units based on independent or open-source structures, applied in educational facilities and internet firms.

Yangtze Memory Technology has achieved mass production of a 64-layer 3D NAND flash memory with a capacity of 256 gigabytes, while in the analog and mixed-signal field, Hua Hong Semiconductor and Unisoc have also become self-sufficient in some product types.

Sales by Chinese mainland chip designers, including integrated device manufacturers and fabless firms, rose 5.3 percent to USD54.3 billion last year from 2021, according to data from chip research institute ICwise. The local chip industry kept growing last year despite the global sector entering a downward cycle, with China's chip design industry likely to be worth over USD100 billion by 2027.

Overseas suppliers have begun to feel the pressure as China’s chip imports fall. South Korea's Samsung Electronics posted its lowest quarterly profit since 2009 in the first quarter of this year after earnings tumbled 86 percent from a year ago, the Suwon-based firm said in its most recent financial report. Operating profit tumbled 96 percent. US chipmaker Qualcomm's net profit sank 42 percent in the three months ended March 25, while revenue dropped 16.9 percent

The US Chips Act's restrictions stymied supplies of advanced process chips for use in China, including for fifth-generation networks, cloud computing, and artificial intelligence, impacting downstream users.

The United States has been increasingly restricting China's imports of high-end chips since 2020, according to experts. Less than 5 percent of these semiconductors are supplied domestically, which has affected the research and development progress of related Chinese firms to a degree, they said.

Editors: Liao Shumin, Martin Kadiev

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Keywords:   China,Integrated Circuit,Import