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China races to stockpile US chips before Trump ramps up sanctions

As more US tech curbs look likely in second Trump term, China’s imports of made-in-America integrated circuits have surged by 60 per cent

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Donald Trump arrives to speak during an election night event at the Palm Beach Convention Centre in Florida. Photo: TNS
Mia Nurmamatin London
China is accelerating its efforts to stockpile microchips from the United States, as it looks to hedge against a potential wave of sanctions from the incoming administration of president-elect Donald Trump.

Beijing’s appetite for US semiconductors has surged in recent months, with purchases reaching US$1.11 billion in October – a 60 per cent increase compared with the same period last year, according to customs data released on Wednesday.

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Over the first 10 months of the year, China imported US$9.61 billion of microchips from the US, up 42.5 per cent year on year. Since June, China’s monthly chip purchases from the world’s largest economy have consistently surpassed US$1 billion.

“China has been increasing the imports of chips and chipmaking machinery in anticipation of the potentially heightened US chip sanctions,” said Liang Yan, a professor of economics at Willamette University in the US state of Oregon.

Of the nine categories of microchip imported from the US, China has been focusing primarily on buying up CPU-based processors and controllers, as well as chips designed for storage and signal amplification.
Without China’s demand, it is difficult for chip production to be profitable and sustainable
Liang Yan, Willamette University
China continues to face challenges in developing more advanced chips. According to a Bloomberg report published on Tuesday, tech giant Huawei Technologies is still relying on the 7-nanometre architecture for its next two Ascend processors, as US technology restrictions prevent the company from accessing more advanced lithography machines.
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This year, President Xi Jinping has emphasised the need for China to develop “new productive forces” – calling for technological breakthroughs in strategic emerging industries such as artificial intelligence (AI), which can help the country promote economic growth, upgrade its industrial chain, and shield itself from global economic and geopolitical pressures.

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