You are using an older browser version. Please use a supported version for the best MSN experience.

China semiconductor imports surge to all-time high in March amid global chip shortage

South China Morning Post logo South China Morning Post 13/04/2021
a person standing in front of a stage: A woman visits a semiconductor device display at the Appliance and Electronics World Expo in Shanghai on March 23, 2021. Photo: Reuters A woman visits a semiconductor device display at the Appliance and Electronics World Expo in Shanghai on March 23, 2021. Photo: Reuters

Semiconductor imports by China surged to an all-time high in March, according to the latest figures released by the country's customs authorities, as an acute chip shortage continued to disrupt major industries around the world.

China imported 58.9 billion semiconductor units in March worth US$35.9 billion, a new monthly high for the category, according to data released by the General Administration of Customs.

In the first quarter of this year, China's total integrated circuit (IC) imports reached 155.6 billion units, up 33.6 per cent from a year ago and worth US$93.6 billion. By comparison, first-quarter chip import volume in 2020 and 2019 totalled, respectively, 116.1 billion units worth US$72.1 billion and 87.6 billion units valued at US$65.2 billion.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

The increased IC imports by China come amid a global shortage of semiconductors that has chip makers scrambling to supply manufacturers worldwide, including from the car and smartphone industries to those in the home appliances and personal computer sectors.

a person standing in front of a laptop: A man visits a display of semiconductor devices at Semicon China, a trade fair for integrated circuit technology, in Shanghai on March 17, 2021. Photo: Reuters © Provided by South China Morning Post A man visits a display of semiconductor devices at Semicon China, a trade fair for integrated circuit technology, in Shanghai on March 17, 2021. Photo: Reuters

The first hints of trouble emerged in the spring of last year, when the coronavirus pandemic spread worldwide. Demand was initially decimated, as manufacturers around the world scaled back production, but it quickly picked up when these customers rushed to get more orders when economies revived.

"We see three major factors that lifted the (chip import) figure this quarter (in China)," said Ivan Platonov, an analyst at research firm EqualOcean. He indicated that many original equipment manufacturers (OEMs) are "hedging against geopolitical risks" and that more firms can now afford extensive inventory because "the chip shortage has extended real product cycles".

"With vaccination campaigns going on, many in the industry expect global consumer demand to rebound, which Chinese electronics companies don't want to miss out on," Platonov said.

In addition, he said most of the chips that China's OEMs are stockpiling cannot be mass-produced on the mainland at the moment. "One example is volatile memory," he added.

After hitting carmakers like Tesla and Sony's PlayStation 5, chip shortages have now spread to China's vast home appliances industry

China's latest chip import figures were released two weeks after Beijing decided to waive levies on imported semiconductor parts and materials until 2030, as the world's second-largest economy doubled down on efforts to turbocharge IC development.

The country plans to use more chips designed and produced by domestic semiconductor companies by 2025 to mitigate supply chain risks brought about by US trade sanctions.

Still, China's total 2021 IC imports are "highly likely to grow at a double-digit rate" from last year, Platonov said.

Meanwhile, in Washington on Monday, President Joe Biden met online with more than a dozen chief executives of major US companies to address the chip shortfall that has idled carmakers worldwide. He also assured them of bipartisan support for his proposed US$50 billion government funding for semiconductor manufacturing and research, part of an initiative to reorient and dominate the global semiconductor supply chain.

a close up of Joe Biden: US President Joe Biden holds up a silicon wafer, as he participates virtually in the CEO Summit on Semiconductor and Supply Chain Resilience in the Roosevelt Room of the White House, on April 12, 2021, in Washington. Photo: AP © Provided by South China Morning Post US President Joe Biden holds up a silicon wafer, as he participates virtually in the CEO Summit on Semiconductor and Supply Chain Resilience in the Roosevelt Room of the White House, on April 12, 2021, in Washington. Photo: AP

At an analyst summit in Shenzhen on Monday, Huawei Technologies Co deputy chairman Eric Xu Zhijun blamed the US for the global chip shortage. He said US trade sanctions on Huawei have caused companies around the world, particularly Chinese firms, to rush to stockpile chips.

"Panic stockpiling is the core reason putting pressure on and causing a shortage of semiconductors around the world this year," Xu said. He indicated that Huawei currently has enough chip inventory to support its operations, but suggested that the company could deplete its chip stockpile if the global shortage continues indefinitely.

More Articles from SCMP

Coronavirus: Hong Kong residents stranded in Britain welcome decision to lift ban on arrivals from the country

Xinjiang court to hear defamation case against German researcher Adrian Zenz over forced labour claims

Hong Kong electoral changes: contest for seats on powerful committee to be held on September 19 as government reveals dates for key polls

China’s Xi Jinping likely to take part in Joe Biden’s Earth Day climate summit

Former Hong Kong lawmakers facing prosecution under national security law hit with fresh charges of contempt of Legislative Council

This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.

Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.

AdChoices
AdChoices
image beaconimage beaconimage beacon