China’s semiconductor firms cash in chips as export boom bucks overall trend

Despite a bevy of US restrictions on China’s semiconductor trade, chip shipments remain high even as overall exports miss expectations

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China’s exports of semiconductors have bucked overall trends and made sizeable gains in 2024. Photo: AFP

Published: 9:00pm, 11 Dec 2024Updated: 9:15am, 12 Dec 2024

Despite intensifying restrictions from the US intended to stifle China’s semiconductor trade, Beijing’s shipments of the bedrock technology stood out as a rare bright spot in a recent export data release.

China’s integrated circuit exports hit a record US$144.7 billion in value for the first 11 months of 2024, growing 18.8 per cent year on year according to customs data released on Tuesday.

In addition to rising global demand and the rapid development of AI, the scale of manufacturing for China’s “legacy” chips – semiconductors behind the bleeding edge of innovation but still widely used for less intensive applications – is reshaping the market.

Chip export volume reached 271.6 billion units from January through November, an 11.4 per cent gain over the same period last year.

China’s mastery of 28-nanometre chip production has helped its companies leverage cost advantages and export aggressively, capturing a significant share of the global market, said Xu Tianchen, senior China economist with the Economist Intelligence Unit.

“Once the technological bottleneck is resolved, it typically leads to large-scale domestic substitution, a surge in exports and eventual overcapacity in production,” he added.