China imports $300 billion worth of chips a year that US suppliers will lose

China imports semiconductors
FILE PHOTO: An interface board bearing CPU (silver) and semiconductors (black) is placed on a researcher's desk at Tsinghua Unigroup research centre in Beijing, China, February 29, 2016. REUTERS/Kim Kyung-Hoon

SHANGHAI (Reuters) – China is likely to import at least $300 billion worth of semiconductors for the third year running, an industry association official said, in a sign of continuing reliance on foreign know-how despite efforts to gain local capability.

“China is the world’s largest importer of chips,” Wei Shaojun, vice-chairman of the China Semiconductor Industry Association, told the World Semiconductor Conference on Wednesday.

“After 2013 our chip imports exceeded $200 billion. In 2018 it exceeded $300 billion and was still at $300 billion in 2019. If nothing out of the norm happens this year, it will still be $300 billion or more,” he said, according to a video of the conference that was published by its organisers online.

Wei added that of the chips that China imported, about half would be exported eventually as they are incorporated into other products.

China has been spending billions of dollars in an effort to try to speed up improvements to its domestic chip industry, an campaign which faces fresh urgency as Washington puts fresh pressure on Chinese tech giant Huawei Technologies Co Ltd.

The Trump administration earlier this month expanded its curbs on Huawei on Monday and banned suppliers from selling chips made using US technology to the firm without a special licence, a move likely to choke the Huawei’s access to even off-the-shelf chips, threaten its crown as the world’s largest smartphone maker and disrupt global tech supply.

China’s efforts to develop an independent chip industry are being led by the likes of its biggest chip maker, Semiconductor Manufacturing International Corp, which plans to sharply increase its capital spending but faces challenges such as a lack of intellectual property.

Wei said, however, that the semiconductor industry was global in nature and that efforts to decouple was potentially harmful to its growth.

(Reporting by Brenda Goh; Editing by Kim Coghill)

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