China's Chip Imports Decline 15% in 2023, Braces New Round of US Ban
China has experienced a 15% decline in chip imports during the first nine months of 2023, as the country prepares for a new round of US tech export controls.
The number of chips imported by China from January to September reached 355.9 billion units, down from 416.7 billion in the same period last year.
The total value of semiconductors imported by China in the past three quarters also fell by 19.8% year on year, amounting to US$252.9 billion.
This decline in chip imports comes as the Biden administration is expected to tighten US semiconductor export restrictions on China. The new controls are part of the US government's efforts to limit China's access to advanced technology. China's tech firms are facing challenges as they continue to pursue development projects amidst export restrictions imposed by the US and its allies.
Despite the restrictions, China's demand for advanced semiconductors remains high, particularly for artificial intelligence (AI) development projects. This has led to a growing market for smuggled graphics processing units (GPUs), such as Nvidia Corp's A100 and H100 devices. The under-the-counter trade in these GPUs has thrived, even after the US government banned their export to China.
The Biden administration is now considering closing a loophole that allows Chinese companies to access American AI chips through overseas units. This move reflects the US government's ongoing efforts to limit China's access to top AI technology. However, it highlights the challenges of completely plugging every gap in trade controls.
In addition to the decline in chip imports from the US, China's total imports from major semiconductor supply chain players like South Korea, Japan, and Taiwan have also fallen. Imports from South Korea saw the steepest drop at 23%, followed by Japan at 16.3% and Taiwan at 20%.
Despite the challenges, analysts expect the release of new 5G handsets by Huawei Technologies to help revive the smartphone manufacturing industry in China, which has been experiencing a decline in activity.]
China's chip imports have declined by 15% in the first nine months of 2023.
The decline comes as the US plans to tighten semiconductor export restrictions on China.
China's tech firms face challenges due to export restrictions imposed by the US and its allies.