China chip imports suffer steepest drop on record after US curbs

China’s chip imports suffered their steepest drop on record last year, hamstrung by prolonged economic uncertainties and US export controls.

The value of integrated circuits imported by the world’s largest semiconductor market fell 15.4% to $349.4 billion, the sharpest fall since Chinese customs data became available in 2004 and falling for the second straight year. Shipment volume also declined by 10.8%.

The sharp downturn underscores persistent weakness in the global chip industry, which has been struggling to emerge from a deep trough. Chinese demand in particular has been hurt by stringent Covid curbs and a tepid post-pandemic recovery. Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, saw its sales drop 4.5% in 2023, though management indicated it still expects healthy growth this year. 

Last year, sentiment received a further blow when US President Joe Biden’s administration escalated restrictions on China’s access to cutting-edge semiconductors capable of training artificial intelligence models, from the likes of Nvidia Corp. and other US suppliers.

Signs are, however, emerging that global chip demand is starting to pick up. Semiconductor sales worldwide rose for the first time in more than a year in November, helped by emerging technologies like AI.