China’s imports of integrated circuits (ICs) shrank 9.6% in volume in the first quarter from a year ago, according to Chinese customs data, marking a sharp retreat from the 33.6% increase in the same period in 2021. The values of ICs it bought, however, were rising. In the first three months of the year, entities in China paid a total of USD107.2 billion for 140.3 billion ICs, up 14.6% year-on-year. The average unit price rose 26% from a year ago, according to calculations by the South China Morning Post. The figures released by the General Administration of Customs (GAC) did not include a breakdown by IC type. China is the world’s largest importer of 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.
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. The lockdown in Shanghai has fanned concerns over disruptions to cross-border supply chains. Pegatron, a Taiwanese contract manufacturer for Apple, said 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.
As China battles 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% to USD29.6 billion, according to a report by trade group SEM. China’s top chip maker, Semiconductor Manufacturing International Corp (SMIC), plans to spend about USD5 billion this year on capacity expansion and R&D, up from last year’s USD4.5 billion. The value of Chinese IC exports increased 23.2% in the first three months from the same quarter last year, while volume fell 4.6% to 70.2 billion units, the South China Morning Post reports.
