New local capacity boosts output of semiconductors in July by 41% y-o-y

Chip-making companies in China are working hard to help solve a global shortage of semiconductor products, as can be seen from the record output of integrated circuits, or ICs, in the country in July, industry insiders said.

China's output of chips surged by 41.3 percent year-on-year to a monthly record of 31.57 billion units last month, according to data from the Ministry of Industry and Information Technology, the nation's top industry regulator.

The surge helped bring China's total IC output in the first seven months of this year to a hefty 203.6 billion units, up 47.3 percent year-on-year.

China exported 178.5 billion units of ICs from January to July, up 35 percent year-on-year, official data showed.

Fu Liang, an independent technology analyst, said that as the global shortage of semiconductors continues to affect automobile, smartphone, PC and other sectors, Chinese chipmakers are beefing up their production capacities.

Strong demand for semiconductors and the addition of new production capacity have helped fuel the rise in output of chips, Fu said.

For instance, SiEn (Qingdao) Integrated Circuits Co, a foundry founded by Richard Chang, an industry veteran and founder of chipmaker Semiconductor Manufacturing International Corporation, recently kicked off production of 8-inch wafers in Qingdao, Shandong province.

To meet the skyrocketing global demand for personal computers amid the COVID-19 pandemic, China has also exported 130 million units of PCs from January to July, up nearly 41 percent year-on-year, confirming that PCs are back to the center of digital lives.

The PC refreshment cycle has shortened and the penetration rate has increased, which has motivated more Chinese companies to enter the PC sector, experts said.

In July, the output of China's electronic information manufacturing sector increased 13 percent year-on-year. The growth rate itself increased by 1.2 percentage points year-on-year, according to the top industry regulator.

As the outbreak continues to affect the global supply chain, China is working hard to leverage its manufacturing powerhouse to ramp up production.

Last month, China set out key economic policy directions for the second half of this year, highlighting that the resilience of scientific and technological innovation, as well as industry and supply chains, must be further harnessed, and fundamental research should be strengthened as well.

A special action plan for industry and supply chains, with measures to resolve bottleneck problems quickly, will likely be released sometime this year, according to a statement released after the July 30 meeting of the Political Bureau of the Communist Party of China Central Committee.

Qiao Biao, deputy head of the China Center for Information Industry Development, a Beijing-based think tank, said a more resilient and flexible industry chain is an important foundation for the growth of China's economy, as uncertainties continue amid the COVID-19 pandemic.

"China's efforts to ensure the stable operation of industry and supply chains will contribute to the whole world, given the nation's position in the global industrial economy," Qiao said.