China's semiconductor imports plunged 23 percent in the first quarter of 2023, in the wake of the increasing chip manufacture by the US and India, according to reports.
Data by the General Administration of Customs shows that China imported only about 108 billion integrated circuits (IC) between January and March this year, which is a 23 percent decline compared with the same period a year ago.
Plunging Imports
A report by the South China Morning Post notes that the total value of China's chip imports fell more than 26 percent to $78.5 billion. This figure was $107 billion in the last year, the report added.
"China's IC exports fell 13.5 per cent year-on-year to 60.9 billion units in the first three months of 2023, compared with a 4.6 per cent drop a year ago. The total value of the exports dropped 17.6 per cent," the report says.
Apart from the US, a host of countries including Japan, the Netherlands and South Korea have enforced restrictions on semiconductor business with China. This has reduced China's options for importing the advanced chips, which are key to many industries, especially the automobile sector.
US Measures
The US has employed several measures in the last few years to make sure that its biggest economic and political rival does not reach a spot of dominance in the field of advanced chips and chip-making equipment.
In October last year, the Biden administration tightened the screws on the Chinese chipmakers by enforcing more export controls targeting them. The move sought to stop not just American companies from selling key equipment and technology to China but persuade foreign firms to do so.
The measures unveiled by President Joe Biden were aimed at closing China out of manufacturing some key semiconductor chips. The new rules further restricted toolmakers like KLA Corp, Lam Research Corp and Applied Materials Inc from shipping any equipment Chinese-owned factories that make advanced logic chips.
In September, the US Commerce Department had slapped new restrictions on chip sales to Chinese companies. As per the department's guidance, US chipmakers must immediately procure a license to supply artificial intelligence chips to Chinese companies. The US says stringent measures are needed to ensure that AI chips are not used by the Chinese for 'military end use'.
CHIPS Act
In another landmark move in July, the US Senate voted to move forward with the CHIPS Act that will provide a $54 billion boost to the country's semiconductor industry. The long-delayed Senate vote fulfilled the chip industry's demand for subsidies that will enable it to compete with China.
The Impact
In a clear sign of the extent of the impact, China's Semiconductor Manufacturing International Corp, which is the country's largest chip maker, said in February that it will have to postpone mass production a new plant it built in Beijing.
