China's Chip Markets: A Surge Driven by General Administration of Customs Data Amidst Export Controls

Chinese Firms Stockpile Semiconductors

In 2024, Chinese firms rushed to stockpile semiconductors, driving a double-digit expansion of integrated circuit (IC) imports. This rush is in light of potential new export controls from Washington, aiming to tighten restrictions on access to advanced chips.

Market Impact and Data Insights

• China imported 549.2 billion ICs in 2024, a 14.6% increase from the previous year.
• Total value of IC imports reached US$385 billion, up 10.4% year-on-year.
• For comparison, crude oil imports were worth US$325 billion.

The accelerated acquisition of chips underscores an escalating tech rivalry with the US, as firms anticipate stringent trade sanctions. The Biden administration plans to launch fresh export controls aimed at addressing loopholes that enable Chinese firms to modernize their military.

Industry Concerns and Regulatory Landscape

Tech groups, including the Semiconductor Industry Association (SIA), have voiced concerns about these upcoming rules. The SIA expressed serious worries that the regulations could undermine US leadership in semiconductor technology.

• IC exports from China rose to 298.1 billion units, an increase of 11.6% year-on-year.
• The value of IC exports hit US$159 billion, climbing 17.4% from last year.

While challenges remain, including the lack of advanced chip manufacturing capabilities in China, firms are increasingly producing legacy chips for consumer electronics.

Future Outlook for the Semiconductor Sector

The Biden administration’s new export controls could reshape the semiconductor landscape significantly before President Biden's term ends on January 20. As global tensions continue, China’s actions in the chip market will remain under scrutiny.