China's semiconductor sector continues its robust growth following recent positive momentum in the A-share market, with several domestic industry players – including Sprint Precision Technologies (Jiangsu) and Ningbo-based Kangqiang Electronics – hitting their daily trading limits in late December. The growth came after 65 listed companies published their business forecasts for the whole year of 2024 ahead of schedule, with more than half of them projecting positive year-on-year growth. Sprint Precision Technologies (Jiangsu) Co, a key components manufacturer in the semiconductor etching and thin-film deposition equipment segment, is expected to achieve a net profit attributable to shareholders ranging from CNY215 million to CNY225 million this year, representing a year-on-year growth of 167.83% to 180.29%. “Globally, there is robust demand in the semiconductor industry. Chinese enterprises have actively engaged in international trade and collaboration, with semiconductor exports reaching record highs. The strong performances of these companies reflect their actual business development in innovation and manufacturing, which I believe is the primary reason behind their success,” Zhou Mi, Senior Research Fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times.
In terms of innovation, China's investment in semiconductor equipment is expected to remain robust, with spending on chip equipment projected to account for 32% of the global share in 2024. China will likely retain its position as the world's top spender on 300-millimeter equipment through 2027, with over USD100 billion in investments anticipated over the next three years. A report by TechInsights suggested that, in the third quarter of 2024, China maintained its position as the world's largest single smartphone market, with smartphone shipments reaching 65.7 million units, continuing a recovery trend for three consecutive quarters. The continuous improvement in China's chip production capabilities and technological advancements over the year, including support from the government for the private sector, with increased investments in talent, equipment, and raw materials, is also a major result of industry growth, Ma Jihua, a veteran telecom industry observer, told the Global Times.
China's semiconductor exports have seen remarkable growth despite the U.S. restrictions. In the first 11 months of 2024, semiconductor exports reached CNY1.03 trillion, representing a 20.3% year-on-year increase, according to China's General Administration of Customs (GAC). As one of the world's largest semiconductor markets, China is set to continue playing a pivotal role in the industry in the coming years, the latest report by TechInsights said. Despite U.S. attempts to suppress the development of China's chip industry through unilateral measures, such as the Section 301 probe, to serve its own strategic interests, the development of China's chip industry will not be obstructed by the hegemonic approach of the U.S., which puts the global chip industrial chain in potential jeopardy, according to the Global Times.
Meanwhile, the White House announced a trade investigation into “legacy” semiconductors made by China on December 23, less than a month before the new administration of president-elect Donald Trump takes power, that could impose additional tariffs on Chinese-made U.S. consumer goods from cars to coffee makers. The inquiry falls under Section 301 that allows Washington to challenge imports on national security grounds. Given the last-minute timing, it will be up to the Trump Administration whether to pursue the probe after taking over on January 20. The investigation by the Office of the U.S. Trade Representative (USTR) could give Trump a platform to impose up to 60% tariffs on all Chinese imported goods.
“This investigation underscores the Biden-Harris Administration’s commitment to standing up for American workers and businesses, increasing the resilience of critical supply chains, and supporting the unparalleled investment being made in this industry,” U.S. Trade Representative Katherine Tai said in a statement. The trade agency added that “evidence indicates” China seeks to dominate domestic and global chip markets through “extensive anticompetitive and non-market means”, including setting and pursuing market share targets. China’s acts, policies, and practices further threaten to hurt the U.S. and allied economies and undercut U.S. economic security, it added. However, a Chinese Ministry of Commerce Spokesperson referred to a report by the U.S. Department of Commerce saying that Chinese semiconductors imports account for just 1.3% of the U.S. market and Chinese chip exports to the U.S. are far lower than China’s imports from the U.S., the China Daily reports.
