China’s semiconductor production plunged by the largest ever in October. Attention is focusing on whether this result is the effect of regulations related to the semiconductor industry that the U.S. is offering toward China.
Hong Kong’s South China Morning Post (SCMP) reported on the 16th that China’s production of integrated circuits (ICs) in October fell 26.7% from the same month last year to only 22.5 billion.
They also explained that this is the biggest monthly drop since 1997 when related aggregations began. The previous record drop was 24.7 percent in August.
The 22.5 billion units produced in October were smaller than the 25.9 billion units produced in April when Shanghai, a Chinese semiconductor base, was hit by the blockade.
According to the National Bureau of Statistics, China’s semiconductor chip production from January to October this year fell 12.3% year-on-year to only 267.5 billion. The sharp drop in semiconductor production in October is in line with China’s first decline in 29 months.
In October, China’s exports fell 0.3 percent from the same month last year to 298.37 billion dollars (about 418 trillion won). It is the first time since May 2020 (-3.3%) that monthly export growth has turned negative.
Zhao Haijun, co-CEO of China’s largest semiconductor company SMIC, warned in a third-quarter earnings announcement on the 11th that slowing demand for home appliances will affect business prospects by the first half of next year. He said, “Due to slowing demand, customers related to smartphones and home appliances are reluctant to make new orders.”
According to market research firm Carnallis, China’s smartphone shipments reached 70 million units in the third quarter, down 11 percent from the same month last year.
SMIC also said it needs time to analyze the latest export regulations announced by the U.S. last month. “Initial analysis, the new regulations are disadvantageous to our production and operation.”
