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China’s semiconductor sales fall 21 per cent in November

China’s semiconductor sales plunged 21.2 per cent year on year to US$13.4 billion in November, as economic headwinds continued to hammer global chip demand for the third consecutive month, according to the latest industry data.

The decline recorded by China marked the biggest percentage drop among the world’s major markets for integrated circuits (ICs), according to data from the Semiconductor Industry Association (SIA), a Washington-based trade group that represents 99 per cent of the US chip industry.

That also represented the biggest year-on-year decline for China since last July, when its monthly sales in 2022 started to head south, SIA data showed. China was the world’s largest semiconductor market in 2021, with total sales of US$192.5 billion.

Worldwide chip sales reached US$45.48 billion last November, down 9.2 per cent from US$50.09 billion in the same period in 2021. Overall global demand started to contract in September last year, when total sales decreased 3 per cent year on year to US$47 billion.

“Global semiconductor sales decreased in November, largely due to market cyclicality and macroeconomic headwinds,” said John Neuffer, the SIA’s president and chief executive. He indicated that “sales into China decreased sharply on a year-on-year basis”, while sales into the Americas region were up compared to November 2021.

The latest SIA chip sales data reflect how disruptions in manufacturing activity, an escalating tech war with the US and economic headwinds continue to weigh on semiconductor demand in China.

China’s chip imports recorded their steepest drop in the 11 months ended November 30 last year, according to the country’s customs data.

China’s IC exports also continued their pace of decline in the same period, falling 11.7 per cent year on year to 250.5 billion units.

While November has traditionally been a peak season for electronics consumption in China, thanks to various promotions linked to the country’s annual Singles’ Day shopping festival, there was lacklustre demand last year.

Smartphone sales, for example, slumped 36 per cent year on year to 22.2 million units last November, according to a report by the China Academy of Information and Communications Technology, a scientific research institute under the Ministry of Industry and Information Technology.

Semiconductor Manufacturing International Corp, mainland China’s largest and most advanced contract chip maker, in November predicted that sluggish consumer electronics demand will weigh on its business outlook through the first half of this year.

Export controls initiated by the US government last year have also put more pressure on China’s semiconductor market. Last month, three dozen Chinese firms, including flash memory chip maker Yangtze Memory Technologies Co, were added by Washington to the US trade blacklist, citing concerns that Beijing was using commercial technologies to modernise its military. That followed the Biden administration’s move last October, when it implemented updates that further restrict China’s ability to obtain advanced chips. South China Morning Post

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