China imported more than 15 percent fewer chips last year after US sanctions

China will have imported more than 15 percent fewer chips in 2023 than a year earlier. This is evident from figures from Bloomberg news agency. Fewer chips were sold worldwide in 2023 due to lower demand, but export restrictions from the US to China also played a role.

In total, the total value of China’s chip imports fell by 15.4 percent last year to approximately 321.1 billion euros. A year earlier, China imported approximately 379.5 billion euros worth of chips. According to Bloomberg this is the largest year-on-year decline since Chinese customs figures became available in 2004. It is also the second annual decline in a row. The number of chips imported by China also fell last year, by 10.8 percent.

According to Bloomberg, the decline is partly due to shrinking demand in the chip market. In 2023, Taiwanese chip manufacturer TSMC, among others, supplied 4.5 percent fewer chips to its customers. However, that company expects to grow again next year, partly due to the growing demand for chips for training AI models. Demand for chips also decreased in China last year due to economic problems, including strict Covid rules in that country.

At the end of 2022, the US government also imposed restrictions on the export of advanced chips to China. For example, companies were no longer allowed to supply certain AI chips to the country, as well as equipment for the production of such chips. At the end of last year, these rules were further tightened, closing certain loopholes. For example, certain AI chips that were specially designed for China, including the Nvidia A800 and H800, may no longer be supplied to the country.