China’s legacy chip production slows in October as possibility of new US sanctions looms

Although production growth slowed to 11.8 per cent in October, semiconductors remain one of China’s fastest-growing industries this year

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The path for China to produce advanced semiconductors is narrowing, but legacy chips remain a booming business. Photo: Reuters

Published: 8:45pm, 15 Nov 2024Updated: 9:14pm, 15 Nov 2024

China’s integrated circuits (IC) output grew at a slower pace in October, pointing to weak demand in the domestic chip sector ahead of an expected tightening of US sanctions in President Joe Biden’s final months in office.

China’s IC output, a broad measure of semiconductor production, grew 11.8 per cent year on year last month to reach 35.9 billion units, according to data published on Friday by China’s National Bureau of Statistics (NBS). It was down slightly from 36.7 billion units in September.

China’s total IC output in the first 10 months of the year increased 24.8 per cent to 353 billion units, according to the NBS data.

While technological hurdles and US sanctions have kept China years behind in advanced chipmaking, domestic production of so-called legacy chips has maintained momentum. Semiconductors is the second-fastest growing industry in China for 2024, outpaced only by electric vehicles (EVs).

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China’s EV output surged 36.3 per cent from January to October, producing 9.9 million vehicles. In October alone, China produced 1.43 million EVs, an increase of 48.6 per cent from a year ago, according to NBS. China’s annual EV production surpassed 10 million units this week, the China Association of Automobile Manufacturers (CAAM) said on Thursday.

Meanwhile, China’s output of industrial robots has increased 13.3 per cent this year through October compared with the same period a year ago. Last month alone, that output expanded 33.4 per cent year on year, according to the statistics bureau.