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China’s semiconductor output declines as local manufacturing increases in India and the US

The South China Morning Post reports that the production of integrated circuits (ICs) fell by 24.7% on an annual basis to 24.7 billion units, the worst monthly drop since 1997.

China experienced its largest-ever monthly decrease in chip manufacture in August as a result of Covid limitations and waning demand, while India and the US increase their local semiconductor manufacturing.

The manufacturing of integrated circuits (ICs) fell by 24.7% year over year to 24.7 billion units, the worst monthly drop since 1997, according to the South China Morning Post.

Additionally, chip manufacturing has decreased for the second month running. The output plummeted 16.6% to 27.2% billion units in July.

Microcomputer production in the country decreased 18.6% in August to 317.5 billion units.

According to the study, domestic industrial activity shrank in August for the first time in three months.

According to information from business database platform Qichacha, a record 3,470 chip manufacturing companies “went out of business in the first eight months of the year.”

The decline in chip production in China coincides with increased efforts by both India and the US to support domestic semiconductor manufacture.

The Gujarati government has teamed up with Vedanta and Foxconn with the goal of investing Rs 1.54 lakh crore in the semiconductor manufacturing industry.

According to a report by the India Electronics & Semiconductor Association (IESA) and Counterpoint Research, India’s semiconductor component market is expected to generate $300 billion in total revenues by 2026 as ‘Make in India’ and production-linked incentive (PLI) schemes will encourage local sourcing of semi-components in the coming years.

Under the PLI programme, the Indian government has announced a separate expenditure of Rs 76,000 crore (about $10 billion) towards the growth of an electronics ecosystem for semiconductor and display production.

The Chips and Science Act, which offers over $52 billion in incentives for the development of semiconductors, has been signed into law by US President Joe Biden in the meanwhile.

Work has begun on Intel’s new $20 billion semiconductor facility in Ohio, USA.

Samsung has put out a concept of investing nearly $200 billion to build 11 more chip plants in the US over the next two decades.

 

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