In an ongoing effort to reduce its dependency on imported semiconductor components against the political backdrop, China has made great strides in developing import substitutes. As per recent data, the country’s import of integrated circuits witnessed a reduction of 10.8% in volume and 15.4% in cost in the past year.
A report by South China Morning Post highlighted that while Chinese companies spent $349.4 billion on importing integrated circuits last year, slightly less, $337.5 billion, was spent on crude oil. Both sectors saw a decrease with circuit spending declining by 15.4% and oil purchases falling by 7.7% compared to 2022.
The decrease in spending on and shipping of integrated circuits to China not only suggests a weaker demand for smartphones and laptops in 2023 but also indicates the success of China’s efforts to replace imported goods with domestic products. A strikingly lower volume, 23.8%, of simpler diode components was imported into China last year compared to the previous year.
Currently, as per TrendForce estimates, 44 silicon wafer processing enterprises are operational within China and 22 more are under construction. By the end of this year, mature technology products(28nm and above) are expected to be produced in 32 Chinese enterprises. Projections from analysts suggest that, by the end of 2027, China’s share in the global market of semiconductor products made via mature technologies will increase from the current 31% to 39%.