China’s imports of chips rose to almost $380 billion last year as the country aims to protect itself from the widening U.S technology ban, according to Bloomberg. Chinese businesses also bought almost $32 billion of equipment to produce computer chips from Japan, South Koreas, Taiwan, and elsewhere, up 20% from 2019.
- Beijing has doubled efforts to develop a domestic chip industry after years of slow progress to protect itself from U.S sanctions.
- Trump’s administration’s actions exposed China’s vulnerability in the tech sector, and even with President Joe Biden, Beijing is pursuing its plan to become self-sufficient in semiconductors.
- The success of China’s semiconductor manufacturing may be a decade-long effort as the country does not have the capability to produce advanced chipmaking equipment.
- China’s stockpiling of chips ahead of U.S restrictions led to about 14% surge in imports in 2020.
- China’s chip purchases have also soared because of the strong global demand for computers and work-from-home technology during the pandemic.
- Global sales of chips is expected to rise by 8.4% this year, benefiting firms such as TSMC, Intel Corp., and Samsung Electronics.
- Chinese government has already cited self-reliance in technology as a national strategic goal, which could see foreign firms lose share in the Chinese market as domestic competitors strengthen.
China’s global imports of computer chips made about 18% of all imports in 2020.