In response to U.S. technology sanctions, the Chinese Communist Party has begun stockpiling chips in large quantities, with spending on computer chips and chip manufacturing equipment rising sharply in 2020.
Bloomberg reported on Feb. 3 that as the U.S. continues to increase sanctions against the Communist Party of China in the technology sector, it has become increasingly difficult for Chinese companies to access U.S. technology, and actions taken by the Trump administration have exposed the vulnerability of the Communist Party in the key area of chips, forcing Beijing to redouble its efforts to develop a domestic chip industry that has seen slow progress for years.
Chinese companies bought nearly $32 billion in computer chip-making equipment from Japan, South Korea and Taiwan last year, a 20 percent increase in imports compared with 2019, according to a Bloomberg analysis based on official Chinese Communist Party trade data.
Last year, Chinese computer chip imports soared to nearly $380 billion, or about 18 percent of China’s total imports that year, as companies such as huawei rushed to stockpile chips before U.S. sanctions took effect.
Research and consulting firm GaveKal Dragonomics (GaveKal Dragonomics) in Shanghai technology analyst Dan Wang (Dan Wang) said that China’s semiconductor industry will remain dependent on imports for some Time to maintain development, China itself is currently unable to produce equipment for the manufacture of advanced chips, although China is increasing investment in this area, but without a dozen years of effort is difficult to have Achievements.
SMIC and other Chinese companies have increased imports of equipment needed to produce semiconductor wafers and computer chips. According to a report by semiconductor industry association SEMI last December, China became the world’s largest market for importing such equipment in 2020.
China’s chip imports grew by about 14 percent in 2020 as Huawei and other technology companies rushed to stockpile chips before U.S. sanctions took effect. The U.S. government has blacklisted Huawei, barring U.S. suppliers from selling it the chips and other components it needs to make smartphones and communications equipment. Then the Trump Administration further tightened the rules, and all companies using U.S. technology and equipment were banned from supplying products to Huawei.
Bloomberg reported that another reason for the sharp increase in Chinese chip imports was the global spread of the Communist Party’s virus Epidemic and countries’ encouragement of teleworking methods at Home, which expanded global market demand for personal computers and technology products related to teleworking. Some of the chips imported by China during this period were used in the production of smartphones, laptops and other electronics vendors, which subsequently exported the devices overseas.
Strong global demand for chips has led to a sharp increase in orders from TSMC and other Taiwanese companies, and Taiwan’s economy has grown beyond expectations, outpacing China’s growth rate for the first time in 30 years.
Bloomberg reported that the market demand for chips is expected to continue to grow in 2021, according to the U.S. Semiconductor Industry Association forecast last December, global chip sales will record an 8.4 percent growth this year, which will continue to benefit TSMC, Intel and Samsung Electronics and other companies.
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