Analysts believe this is due to deflation, which occurs when the price of the currency rises and demand for semiconductors falls as companies hope to purchase more chips in the future.
Chip imports to China decreased significantly by 15.4% compared to last year. Bloomberg analysts believe this could significantly weaken the country’s tech sector.
While China imported chips worth $413 billion in 2022, this figure reached $349 billion in 2023, with a decrease of 15.4%. It’s no surprise that the decline occurred; Even Taiwanese company TSMC, generally considered one of the world’s most advanced manufacturing companies, saw a 4.5% decline in sales. However, the 15.4% decline in shipments suggests that China is experiencing supply problems unrelated to weakening demand for semiconductors worldwide.
It is possible that the whole point is in the economic problems of the PRC, for example, in high deflation (deflation is a process opposite to inflation, in which the currency does not lose value, but on the contrary grows – ed.). A deflationary economy encourages consumers not to spend money because it increases in value, meaning they may buy more or more expensive goods if they wait. The reason for the decrease in demand for semiconductors was deflation in the Middle Kingdom.
However, shipments fell only 10.8% compared to a 15.4% drop in value; This means that the chips that China does not buy in 2023 are especially valuable. The media recalls that this was probably influenced by US sanctions against China, which did not allow the purchase of advanced graphics cards, in particular from Nvidia – The media recalls that the sale of H100, H200, GH200 and RTX 4090 to Chinese companies was prohibited. The A800 and H800 processors were created specifically for China to replace the A100 and H100, but were still quickly blocked due to new sanctions.
Important
Of course, China also refuses to import processors and prefers to produce them itself. As technology catches up with Western rivals, the country looks set to double its chip production in the next five years. China is also working on the 5nm process, producing consumer-grade chips and GPUs, and even moving into devices like data center processors and AI-powered GPUs. Even if there are no economic problems or sanctions, domestic semiconductor production will inevitably lead to a decrease in imports to China.
We previously reported that the Chinese military and government were purchasing Nvidia chips despite the US ban. Chinese scientists could use American processors to train military AI, researchers say.
Source: Focus
Ashley Fitzgerald is an accomplished journalist in the field of technology. She currently works as a writer at 24 news breaker. With a deep understanding of the latest technology developments, Ashley’s writing provides readers with insightful analysis and unique perspectives on the industry.