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Over 5,700 Chinese Chip Companies Disappeared in 2022

Well-known Chinese news site Sina (NASDQ: SINA) recently reported that China’s “chip gold rush” is now showing signs that the tide is ebbing. Based on the latest statistics, in 2022, China revoked and cancelled the registration of 5,746 chip-related companies, far exceeding previous years. This represented an increase of 68 percent from 3,420 in 2021. Data further showed, in the four months from September to December last year, more than 2,300 chip companies were suspended or deregistered in China. This means that on average, more than 15 chip companies dropped out of the industry. With the U.S. Federal Reserve raising interest rates, inflation, the US-China decoupling, and the global semiconductor industry entering a downward cycle, it has been difficult for the domestic chip industry to remain untouched. The performance reports of the 49 domestic listed chip companies are seeing a year-over-year decline in net profit. These companies are suffering both on the performance side and on the side of the sale of stock prices. In addition, the United States continues to restrict semiconductor exports to China, which has also greatly affected the performance of the Chinese chip companies and industry confidence. China’s integrated circuit industry started and rose in the wave of globalization, and is accustomed to a global resource allocation. Now that the industrial development situation has changed, Chinese companies must adjust their strategies as soon as possible. The new mission is to find out how to reduce imports, increase local production, and strengthen the export of domestically produced chips while ensuring the safety of the supply chains. It is critical for China to form its own product family system and technical standards.

Source: Sina, February 16, 2023