China’s chip imports climb to nearly $380 billion in 2020

Imports of Chinese chips climbed to nearly $380 billion in 2020, or about 18 percent of total domestic imports, as the U.S. ban prompted companies such as Huawei to stock up on chips.

China bought nearly $32 billion in equipment from Japan, South Korea and other places for chip production in 2020, up 20 percent from 2019, according to a Bloomberg analysis of official trade data.

“In the short term, China will rely on imports to improve its chip manufacturing level,” said Wang Dan, a technology analyst at Gavekal Dragonomics. “China does not yet have the capacity to produce the chip manufacturing equipment required for advanced processes. But China is investing heavily, and success requires ten years of hard work.”

Chinese chip-making companies, such as SMIC, have bought more of the equipment needed to make silicon wafers and chips. According to a December report by the semiconductor Industry Association International (SEMI), China has become the largest market for semiconductor equipment in 2020.

Chinese chip imports surged about 14% in 2020 as Chinese companies stockpiled chips ahead of time due to restrictions imposed by the U.S. ban. In addition, strong demand for PCs, as the coronavirus pandemic forced them to work and study from home, has also spurred imports of Chinese chips and exports of smartphones and PCs.

According to statistics, the seven major sources of China’s over $300 billion in chip imports include Taiwan, South Korea, Japan, the United States, Malaysia, the Philippines, and Vietnam. Among them, Taiwanese companies, including TSMC, benefited the most.

In 2021, the demand for chips will continue to grow. The International Semiconductor Industry Association predicted in December that global chip sales will increase by 8.4% this year, and companies such as TSMC, Intel, and Samsung Electronics will continue to benefit. Chinese chip manufacturing companies will also continue to buy semiconductor equipment to produce more chips, which should help sales growth at companies such as Tokyo Electron and ASML.

Reliance on foreign technology has attracted enough attention from the government, and has made technology self-sufficiency a national strategic goal.

In order to solve the problem of talent shortage, integrated circuit has been upgraded to a first-level discipline this year. Recently, 90 domestic units jointly filed an application for the establishment of the National Integrated Circuit Standardization Technical Committee to put forward standards for the development of China’s integrated circuit industry to keep pace with the times.

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