China’s import of integrated circuits (ICs) reached a record high in September as companies stockpiled chips amid concerns over supply disruptions due to US-China tensions – especially after the latest restrictions on Huawei Technologies – and the coronavirus pandemic.
ICs, a collection of electronic components built onto a single piece of semiconducting material, are the backbone of almost all electronic devices. These tiny electronic components process data for products ranging from smartphones to cars and spacecraft.
In September, China imported over 53.7 billion ICs, 12 per cent more than the month before and an all-time high, according to data the country’s General Administration of Customs released on Tuesday. The ICs imported in September were worth 256.9 billion yuan (US$32.8 billion) in total, according to the customs authority.
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From January to September, China imported 387.2 billion ICs, an increase of 23 per cent from the same period last year, the data showed.
Sheng Linghai, an analyst at Gartner, said Chinese companies are stocking up on integrated circuits after the US banned local telecommunications giant Huawei from doing business with key chip suppliers such as Qualcomm and Taiwan Semiconductor Manufacturing Company (TSMC), unless they obtain a licence from the US Commerce Department.
“Huawei’s situation is a warning to other companies,” Sheng said.
Companies have also been stockpiling chips due to concerns about global supply chain interruptions due to the pandemic, according to Ministry of Commerce spokesman Gao Feng.
At the same time, the rise in IC imports reflect recovering market demand due to lifestyle changes during the pandemic, Gao said at a press conference, according to a transcript posted on the ministry’s website. “For example, online working, distance education and internet medical services have driven demand for servers, personal computers, tablets, and medical electronics.”
More from South China Morning Post:
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- Huawei’s stockpiling of chips drives up Taiwan exports for second consecutive month
- Huawei wrests crown of world’s biggest smartphone vendor from Samsung on strong China sales
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