According to Liberty Times, citing Chinese meida outlet TMTPost, as the U.S. has imposed sanctions on China’s semiconductor industry since 2019, over 22,000 Chinese chip companies have shut down as of the end of 2023.
The report pointed out that a large number of Chinese chip companies have gone out of business, mainly because many small and medium-sized companies lack the necessary core technologies and face difficulties overcoming technical barriers
Another issue is the lack of investment, particularly for smaller chip companies, as the report indicated. The U.S. restricts investment in China’s semiconductor industry, and under U.S. sanctions, European investors are also hesitant to invest in Chinese chip companies.
The report mentioned that while large companies have invested billions of dollars to secure alternative suppliers, and Huawei is said to have established a network of foundries to sustain its business, smaller chip companies lack the resources to keep up without government financial support.
On the other hand, China recorded a trade deficit in chips totaling USD 122 billion in the first seven months of 2024, highlighting its continued reliance on imported high-end chips, as the report noted.
According to the report, citing data from China’s General Administration of Customs, in the first seven months of this year, China imported 308.1 billion chips with a total value of approximately USD 212 billion, marking year-on-year increases of 14.5% in quantity and 11.5% in value compared to the same period in 2023, which suggests that Chinese companies were actively stockpiling high-end chips, such as high-bandwidth memory (HBM), ahead of U.S. export restrictions on these products.
Meanwhile, in the first seven months of this year, China exported 166.6 billion chips, mainly traditional chips used in automobiles, home appliances, and various consumer electronics, totaling USD 90 billion, with year-on-year increases of 10.3% in quantity and 22.5% in value, as the report pointed out.