China’s imports of integrated circuits (ICs) shrank 9.6 per cent in volume in the first quarter from a year ago, according to Chinese customs data, marking a sharp retreat from the 33.6 per cent increase in the same period in 2021.
The values of IC units it bought, however, were rising. In the first three months of the year, entities in China paid a total of US$107.2 billion for 140.3 billion IC units, up 14.6 per cent year on year. The average unit price rose 26 per cent from a year ago, according to the Post‘s calculation, based on customs data.
The figures released by the General Administration of Customs on Wednesday did not include a breakdown by IC type.
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China is the world’s largest importer of foreign chips, which are used for producing electric vehicles, smartphones and other consumer electronics, many of which are then exported to the rest of the world, including markets where the semiconductors originally came from.
The reduction in import volume comes amid China’s vigorous push towards technological self-sufficiency. But China’s position in the global value chain is also under growing pressure amid rising geopolitical headwinds and Beijing’s dynamic zero-tolerance approach towards the coronavirus.
On Tuesday, World Bank president David Malpass told Reuters it is “probably good for everyone” that countries around the world are trying to diversify supply chains and reduce dependence on China.
Meanwhile the draconian lockdown in Shanghai, China’s financial centre, has fanned concerns over disruptions to cross-border supply chains.
Pegatron, a Taiwanese contract manufacturer for Apple, said on Tuesday it has paused production in two factories in Shanghai and the nearby manufacturing hub Kunshan to comply with government Covid-19 controls. Delivery delays in Shanghai are expected to last until the end of this month before there is any chance for improvement, research firm TrendForce said in a note published on the same day.
As China battles a spate of Omicron outbreaks, its bid to shore up its domestic semiconductor production capability continues, despite failures to secure the latest state-of-the-art equipment and technologies.
Last year, China remained the world’s largest semiconductor manufacturing equipment market, with sales increasing by 58 per cent to US$29.6 billion, according to a report by trade group SEMI this week.
China’s top chip maker, Semiconductor Manufacturing International Corp, has plans to spend about US$5 billion this year on capacity expansion and R&D, up from last year’s US$4.5 billion.
The value of Chinese IC exports increased 23.2 per cent in the first three months from the same quarter last year, while volume fell 4.6 per cent to 70.2 billion units.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.
