Chart of the Day: New Trade Barriers Threaten China’s Surging Chip Exports

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China’s chip exports were a standout in May, as growth was buoyed by strong overseas demand and a low comparison base, but experts warn that the outlook for further expansion remains uncertain due to new U.S. tariffs.

Integrated circuit exports jumped 28.5% in May in U.S. dollar terms from a year earlier to $12.6 billion, according to data released by the General Administration of Customs on Friday. Exports rose 21.2% to $62.6 billion in the first five months of the year.

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China's integrated circuit exports surged 28.5% year-on-year in May to $12.6 billion and grew 21.2% in the first five months to $62.6 billion.
Growth attributed to strong overseas demand and a low comparison base, but new U.S. tariffs and trade barriers cast uncertainty on future expansion.
Worldwide chip sales rose 15.8% to $46.4 billion in April, with global sales expected to increase 16% in 2023 and 12.5% in 2025.

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Who’s Who

Huajin Securities Co. Ltd.: Huajin Securities Co. Ltd. analysts attribute China's 28.5% rise in chip exports in May partly to a low comparison base. They maintain a zero year-on-year growth outlook for China’s overall exports due to trade barriers such as new U.S. tariffs.

Semiconductor Manufacturing International Corp. (SMIC): Semiconductor Manufacturing International Corp. (SMIC), a Chinese chipmaking giant, reported increased exports and higher industry demand in the first quarter of 2023. Co-Chief Executive Zhao Haijun noted a significant rise in urgent orders and inventory replenishments from global clients. However, Zhao remains uncertain about sustaining this demand boost in the second half of the year.

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What Happened When

March 2023：: The U.S. Department of Commerce proposed rules regarding the use of funds and incentives offered under the Chips and Science Act.

September 2023：: The proposed rules from March 2023 regarding the Chips and Science Act were finalized.

April 2024：: Worldwide chip sales increased 15.8% to $46.4 billion, according to the Semiconductor Industry Association.

May 2024：: China's chip exports jumped 28.5% from a year earlier to $12.6 billion, with overall exports rising by 7.6% and imports increasing by 1.8%.

Last month (Before June 2024)：: Washington announced sweeping tariff hikes on $18 billion worth of Chinese imports, including doubling the rate on semiconductors to 50%.

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