China’s chip production is shrinking while India and the US ramp up local manufacturing

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While India and the US are doubling their domestic semiconductor manufacturing, China saw its biggest monthly drop in chip production ever in August due to Covid restrictions and weaker demand.

Integrated circuit (IC) production slumped 24.7 percent year-on-year to 24.7 billion units, the biggest one-month drop since 1997, according to the South China Morning Post.

This is also the second straight month of decline for chip manufacturing. In July, production collapsed by 16.6 percent to 27.2 billion units.

Local production of microcomputers fell 18.6 percent to 317.5 billion units in August.

In August, domestic manufacturing activity contracted for the first time in three months, the report said.

A record 3,470 chipmakers “went bust in the first eight months of the year,” according to statistics from enterprise database platform Qichacha.

The slump in chip production in China comes as both India and the US step up efforts to boost local chip manufacturing.

The Gujarat government has partnered with Vedanta and Foxconn to achieve an investment of Rs 1.54 lakh crore to achieve self-sufficiency in semiconductor manufacturing.

India’s semiconductor components market is expected to reach US$300 billion in cumulative revenue by 2026 as Make in India and Production Linked Incentive (PLI) schemes will boost local sourcing of semi-conductor components in the coming years, according to the report by India Electronics & Semiconductor Association (IESA) and Counterpoint Research.

The Government of India has announced spending of Rs 76,000 crore (about US$10 billion) separately to develop a semiconductor and display manufacturing electronics ecosystem under its PLI program.

Meanwhile, US President Joe Biden signed the Chips and Science Act, which provides nearly $52 billion in stimulus for semiconductor manufacturing.

Intel has started work on its new $20 billion semiconductor fab in Ohio, USA.

Samsung has floated the idea of ​​investing nearly $200 billion to build 11 more chip factories in the US over the next two decades.

–IANS

na/svn/

(Only the headline and image of this report may have been edited by Business Standard contributors; the rest of the content is auto-generated from a syndicated feed.)

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