$160B Challenge: China’s Chip Exports Soar 17.4% Outpacing Mobile Exports Despite US Restrictions

China’s semiconductor industry achieved a milestone in 2024 with $160 billion in exports, growing 17.4% year-on-year.

Introduction

China’s semiconductor industry has shown remarkable resilience amid tightening U.S. export restrictions. In 2024, the country’s integrated circuit (IC) exports reached a record-breaking $160 billion, marking a 17.4% year-on-year increase.

Here are the key highlights:

Record Growth: Exports hit $159.5 billion in 2024, the highest ever.

Sustained Momentum: 14 consecutive months of export growth.

Global Impact: China’s mature process capacity in semiconductors expected to surpass Taiwan’s by 2027.

Strategic Collaborations: Major European chipmakers expanding partnerships with Chinese fabs.

Adaptation: Growth in exports despite U.S. sanctions aimed at curbing China’s semiconductor progress.

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The U.S. semiconductor Restrictions: A Quick Recap

In October 2022, the Biden administration implemented strict export controls on semiconductor technologies to limit China’s access to advanced chips.

The measures targeted critical technologies such as high-performance GPUs, AI chips, and equipment for manufacturing cutting-edge semiconductors.

These restrictions aimed to slow China’s advancements in AI, defense, and quantum computing.

The U.S. also banned telecommunications equipment from Huawei and ZTE, further escalating trade tensions.

Despite these measures, China’s semiconductor exports have maintained a strong upward trajectory.

Details

According to customs data, China’s integrated circuit exports in 2024 reached USD 159.499 billion (¥1,135.16 billion), reflecting a 17.4% year-on-year increase. The report also highlights that the sector’s export value has surpassed that of mobile phones, which totaled USD 134.363 billion in the same year.

As reported by MyDrivers, despite intensified U.S. chip export restrictions in recent years, China’s integrated circuit exports have shown consistent growth, rising from USD 101.578 billion in 2019 to USD 159.499 billion in 2024. Although there was a temporary decline in 2023 (from USD 153.918 billion to USD 135.973 billion), the overall trend has remained upward.

In October 2022, the Biden administration introduced export controls to limit China’s access to advanced U.S. semiconductors and technologies. This was followed by a ban on the sale of new telecommunications equipment from Chinese companies Huawei and ZTE.

Amid these developments, major European chipmakers such as Infineon, NXP, and STMicroelectronics have sought to strengthen collaborations with Chinese fabs. As noted in a report by STCN, STMicroelectronics has already partnered with Hua Hong Semiconductor, China’s second-largest foundry, to advance the production of 40nm microcontroller units (MCUs). This collaboration aims to address market demand and enhance supply chain efficiency.

Export Data: A Record-Breaking 2024

According to Chinese customs data, the export value of integrated circuits in 2024 reached $159.499 billion (¥1,135.16 billion).

This marks a 17.4% increase compared to 2023, when exports briefly dropped to $135.973 billion.

From 2019 to 2024, China’s IC exports grew steadily from $101.578 billion to $159.499 billion. This growth demonstrates the sector’s resilience and its ability to adapt to geopolitical challenges.

Interestingly, semiconductor exports have now surpassed mobile phone exports, which totaled $134.363 billion in 2024.

This shift highlights the increasing global demand for chips in various industries, from consumer electronics to automotive.

Mature Process Capacity: A Competitive Edge

A report by TrendForce projects that China’s mature process capacity in semiconductors will grow from 34% in 2024 to 47% globally by 2027. This increase is expected to outpace Taiwan, whose share will decline from 43% in 2024 to 36% in 2027.

Mature processes, which involve older but highly reliable nodes, are essential for producing chips used in cars, industrial applications, and IoT devices. This segment is less affected by U.S. restrictions, giving China a competitive edge.

Strategic Partnerships with European Chipmakers

European semiconductor companies have recognized China’s growing importance in the global supply chain.

Key players like Infineon, NXP, and STMicroelectronics are deepening their collaborations with Chinese manufacturers.

STMicroelectronics: Partnered with Hua Hong Semiconductor, China’s second-largest foundry, to produce 40nm microcontroller units (MCUs).

This collaboration aims to meet rising market demand and enhance supply chain efficiency.

NXP: Announced plans to expand its production capacity in China. The goal is to establish a localized supply chain and capitalize on China’s robust manufacturing ecosystem.

These partnerships underscore the interdependence of global semiconductor players, even amid geopolitical challenges.

Driving Factors Behind China’s Growth

Several factors have contributed to the sustained growth of China’s semiconductor exports:

Domestic Investment: China has invested heavily in its semiconductor industry, building fabs and developing homegrown technologies.

Global Demand: Chips are essential for emerging technologies like EVs, 5G, and AI, driving demand across sectors.

Mature Nodes: China’s focus on mature nodes has enabled it to sidestep some U.S. restrictions targeting advanced technologies.

Government Support: Policies like tax incentives and subsidies have bolstered local semiconductor firms.

techovedas.com/5-key-insights-into-umcs-strategy-and-challenges-for-2025/

Challenges Ahead

Despite its progress, China’s semiconductor industry faces several hurdles:

  1. Advanced Node Restrictions: U.S. sanctions still limit access to cutting-edge tools and technologies.
  2. Supply Chain Dependencies: China relies on imports for certain high-end chip components and equipment.
  3. Global Competition: Countries like South Korea and Taiwan remain leaders in advanced chip manufacturing.

However, China’s consistent growth and strategic partnerships suggest it is well-positioned to address these challenges.

techovedas.com/wafer-processing-equipment-market-to-hit-16-82-billion-by-2034-with-5-5-cagr-surge/

Future Outlook

The global semiconductor landscape is undergoing a significant shift. With China’s mature process capacity poised to dominate by 2027, the country is expected to play a pivotal role in the chip supply chain.

European partnerships and steady export growth indicate that China’s semiconductor industry is not only resilient but also increasingly influential.

While U.S. restrictions may slow progress in advanced technologies, they have not deterred China’s overall growth in the sector.

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Conclusion

In summary, China’s record-breaking $160 billion semiconductor export milestone in 2024 highlights the nation’s ability to adapt and thrive in a challenging geopolitical environment.

As demand for chips continues to grow, China is likely to remain a key player in the global semiconductor market.
Source

Kumar Priyadarshi
Kumar Priyadarshi

Kumar Joined IISER Pune after qualifying IIT-JEE in 2012. In his 5th year, he travelled to Singapore for his master’s thesis which yielded a Research Paper in ACS Nano. Kumar Joined Global Foundries as a process Engineer in Singapore working at 40 nm Process node. Working as a scientist at IIT Bombay as Senior Scientist, Kumar Led the team which built India’s 1st Memory Chip with Semiconductor Lab (SCL).

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