China’s chip imports slumped 27% in the first two months of 2023 by volume, according to China’s customs data published on Tuesday, reports the South China Morning Post. China imported 67.6 billion integrated circuits (IC) in January and February, down 26.5% from the same period last year, according to data released by the General Administration of Customs. The drop was steeper than the 15.3% decline recorded for all of 2022, which was the country’s first annual fall in IC imports in two decades.
The total value of the imports also tumbled 30.5% to $47.8 billion, down from $68.8 billion last year. Chip prices are down this year owing to a supply glut and a slowing global economy, a reversal from a year ago when prices were still rising as the market recovered from the 2021 chip shortage.
China is also facing fewer options for imports as the US has escalated export restrictions on advanced chips—especially those with artificial intelligence applications such a Nvidia’s A100 graphics processing unit (GPU)—and the country has ramped up domestic production of semiconductors using mature process nodes.