Chinese Semi Shipments Hit Record 31.6 Billion Chips in July

Chinese semiconductor manufacturers increased their shipments of chips in July compared to June and set a new all-time record. Every day, the semiconductor industry in China produced over a billion integrated circuits (ICs), but it is going to take a lot of time before the country's production of semiconductors outpace imports. 

Chinese semiconductor producers (including makers of 3D NAND, DRAM, and logic components) manufactured 31.6 billion chips in July (up 41.3% compared to July, 2020), over one billion of ICs per day. To put the number into context, the Chinese semiconductor industry made 30.8 billion chips in June and 29.9 billion ICs in May. 

So far this year, Chinese semiconductor makers have produced 203.6 billion of chips, according to the National Bureau of Statistics, reports the Southern China Morning Post. That's up 47.3% year-over-year, a very impressive result, especially considering the fact that companies like Semiconductor Manufacturing International Co. (SMIC) cannot easily get the equipment they need from American companies, as they're blacklisted by the U.S. government.  

The Chinese semiconductor industry has always been subsidized by the government in one way or another, which helped tens of thousands of local chip designers to emerge. Meanwhile, Chinese semiconductor producers have failed to catch up with their Taiwanese or Western rivals, which is why the government decided to focus on supporting only select major makers of chips, such as SMIC as well as Hua Hong, and let smaller makers go bankrupt or be absorbed by the bigger players.  

Recently Huaian Imaging Device Manufacturer Corporation (HiDM), an unfinished fab in Jiangsu province, was sold for $260 million to state-controlled Rongxin Semiconductor, an example of such an absorption. 

Meanwhile, despite sanctions by the U.S. government, SMIC, China's largest contract maker of chips, has actually increased its production capacity and output in the current year, to a large degree because of skyrocketing demand for all kinds of chips.