China’s chip, electronics manufacturing fail to rebound
China’s production of semiconductors fell by nearly 15 percent in 1Q23 compared with the same quarter a year before, according to Bloomberg citing China’s National Bureau of Statistics.
Similarly, smartphone production shrank by 13.8 percent in the same period as local brands Oppo, Vivo and Xiaomi struggled with weak demand for Android phones. The output of computers in China dropped by an even greater amount, Bloomberg said
China’s electronics production was in decline despite a strong rebound in the overall economy after the government called an end to the stringent Covid lockdown regime at the end of 2022.
China’s gross domestic product (GDP) in 1Q23 was up 4.5 percent compared to a year before but the downturn in electronics weighed down China’s industrial output, which was up 3.9 percent in March, Bloomberg said.
The results show the impact of both the direct and indirect consequences of the export control regime being imposed on China by the US. One indirect result is that many western companies are switching orders away from China and towards other locations. China is also facing elevated competition from factories being set up in Vietnam and India by manufacturers to diversify their global footprints.
The imposition of export controls on a broad range of semiconductor manufacturing equipment by the US is signalling to chip buyers that China’s ability to manufacture advanced semiconductors either is, or will be, impacted.
Related links and articles:
China’s chip buying crashed in 1Q23 as Biden sanctions bit
Report: Chinese firms breaking Russian embargo with US chips
China’s chip market drops by a third as global free fall continues
Advanced logic, memory, YMTC come under China export controls
Japan, Netherlands agree to help US limit exports to China
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