China experienced a significant drop in semiconductor imports last year, marking the largest decline on record. Despite chips remaining the country’s most important import item, customs data reported by Beijing revealed that the value of semiconductor imports decreased by 15.4 percent to $349.4 billion. This decline also represented a 10.8 percent decrease in volume compared to 2022, the first decline since 2004.
The decrease in China’s semiconductor imports can be attributed to several factors. Firstly, the weak demand for semiconductors in 2023, partly due to high interest rates in western countries and a lackluster post-pandemic recovery in China itself. In fact, worldwide semiconductor revenue dropped by 11.1 percent to $533 billion during the year, according to data from Gartner.
The decline in semiconductor manufacturing was particularly evident in the memory sector. Revenue for DRAM declined by 38.5 percent to $48.4 billion, while NAND flash revenue shrank by 37.5 percent to $36.2 billion. Memory segments such as smartphones, PCs, and servers faced weaker demand and were impacted by excess channel inventory in the first half of the year.
Interestingly, Intel reclaimed the top spot in terms of semiconductor maker revenue, surpassing Samsung. This was likely influenced by the lackluster performance of memory vendors. Nvidia also made significant gains, with a 56.4 percent increase in revenue, driven by strong demand for GPUs and AI applications.
China’s import decline may also be attributed to the US decision to impose restrictions on the export of advanced semiconductors to the country. This move, supposedly to prevent Beijing’s military from accessing advanced compute technology needed for AI development, has prompted Chinese chipmakers to seek partnerships with Japanese counterparts. Chinese representatives have been participating in group tours to network with Japanese chip companies, with the aim of deepening existing relationships, discovering new suppliers, and navigating the updated restrictions.
While concerns have been raised about the potential for technology theft and reverse engineering, these efforts highlight the impact of geopolitical factors on China’s semiconductor industry. As the largest global importer of semiconductors, China’s import decline underscores the broader challenges faced by the global semiconductor market.
The source of the article is from the blog bitperfect.pe