back to article China's semiconductor and IC imports have slumped. Why on Earth could that be?

China's imports of semiconductors and integrated circuits plunged year-on-year for the first two months of 2023, at a time when the country is exiting COVID restrictions and the US is enforcing industry sanctions. Data released Tuesday by China Customs showed integrated circuit imports declined by 26.5 percent to 67.58 billion …

  1. chuckufarley Silver badge

    So China may be forced...

    ...To reinvent the wheel. What would happen if they wind up inventing a better wheel?

    1. Wellyboot Silver badge

      Re: So China may be forced...

      They'd have better wheels for the short time it took for the know how to arrive elsewhere...

      1. Bartholomew

        Re: So China may be forced...

        Well there are patents, so they would have 20 years of protection (or royalties).

    2. Pascal Monett Silver badge

      Re: So China may be forced...

      There would be more competition. You know, that thing the US is always crowing about when it's the top dog in the market ?

    3. Martin Gregorie

      Re: So China may be forced...

      That's pretty much what happened in the mid-late'60s, during the Vietnamese war, when there was some sort of technology embargo placed on China.

      One of my (NZ) universitiy's chemistry lecturers visited China around 1967 because he wanted to see what effect Vietnam + embargo had on Chinese science, and got a roasting from the local press for doing anything as outrageous as actually going to see that sort of thing for himself. He gave a lecture to chemistry graduates on his return, and very interesting it was too: the major effects of the embargo on Chinese science were:

      * a determination not to rely on importing anything they could make themselves (this effect still seems to be alive and well)

      * more attention was paid to increasing Chinese scientific R&D

      * a move to start making as much scientific equipment as possible in China. I remember him saying that most of their older instruments were made in West Germany, but all their new kit was Chinese made and that it seemed to be as good as the current German instruments we were using in NZ.

    4. pimppetgaeghsr

      Re: So China may be forced...

      They'll need to steal a lot more IP and embed their party members in organisations around the world to collect more info and experience. I see it a real possibility as western organisations soon being unable to employ people with that nationality or keep their organisations ring-fenced to prevent exposure to spies.

      We'll see how that mixes with the current western corporate diversity lip-service when push comes to shove. Western countries are already struggling to make chips, at best the current generation of engineers are only able to modify mature designs, not create something fully fledgling, so I doubt China will have much luck either with or without 50 years of Silicon Wager fabrication behind them.

      1. Old-dog

        Re: So China may be forced...


      2. Anonymous Coward
        Anonymous Coward

        Re: So China may be forced...

        We already know China has been stealing IP on a grand scale. The most obviously relevant recent example being the theft of ASML IP by a Chinese employee.

        As for ring-fencing of foreign nationals, this already happens for an awful lot of companies doing any defense work in the UK, See para 39 or so and decide for yourself whether or not China might be a country of "Special Security Interest", and that's just for visitors nevermind employees. It wouldn't be a big leap to expand rules like this to companies of strategic national interest.

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  3. Zolko Silver badge

    Why on Earth could that be?

    Because they produce it in China now, for example ?

  4. Peter2 Silver badge

    If you look at the effect of sanctions, then once you get past the initial effect then it simply forces the country to create a competing economy that can actually make things.

    If you really want to destroy an economy then the western experience would appear to be that more damage is caused by a country dumping things below the local production price until all of the local companies making things go bust and their supply chains collapse.

    1. Anonymous Coward
      Anonymous Coward

      Actually it's much quicker to subsidise the election of a bunch of self-entitled bozos and have them destroy the economy through sheer greed and incompetence.

    2. TheInstigator

      There is another better way.

      Invade the country under the auspicies of bringing freedom, democracy, justice and the rule of law

  5. Anonymous Coward
    Anonymous Coward

    The Continental Blockade

    Napolean's blockage of trade with Britain might provide food for thought. I actually learned about nearly a half century ago in 5th form history class which was mainly focused on the GREAT part of great britain and I remember the emphasis on how Britain heroically turned the embargo to it's advantage.

    Although history repeats itself, it never does so in exactly the same way twice, so I would hesitate to draw any concrete conclusions. Nevertheless, straight from wikipedia -

    The Continental Blockade (French: Blocus continental), or Continental System, was a large-scale embargo against British trade by Napoleon Bonaparte against the British Empire from 21 November 1806 until 11 April 1814, during the Napoleonic Wars. ...

    The System had mixed effects on British trade. The embargo encouraged British merchants to seek out new markets aggressively and to engage in smuggling with continental Europe. Napoleon's exclusively land-based customs enforcers could not stop British smugglers, especially as these operated with the connivance of Napoleon's chosen rulers of Spain, Westphalia, and other German states.[13][14] British exports to the Continent fell between 25% to 55% compared to pre-1806 levels. However, trade sharply increased with the rest of the world, covering much of the decline. ...

    The episode seriously hurt France itself. Shipbuilding, and its trades such as rope-making, declined, as did many other industries that relied on overseas markets, such as the linen industries. With few exports and lost profits, many industries were closed down. Southern France, especially the port cities of Marseille and Bordeaux, as well as the city of La Rochelle, suffered from the reduction in trade. Moreover, the prices of staple foods rose in most of continental Europe. Napoleon's St. Cloud Decree in July 1810 opened the southwest of France and the Spanish frontier to limited British trade, and reopened French trade to the United States. It was an admission that his blockade had hurt his own economy more than the British. It had also failed to reduce British financial support for its allies.[21] The industrialized north and east of France, and Wallonia (the south of today's Belgium) saw significantly increased profits due to the lack of competition from British goods (particularly textiles, which were produced much more cheaply in Britain)

    I guess nowadays for smuggling we might substitute Made in China, relabeled in Vietnam, and imported by Amazon.

    1. NeilPost

      Re: The Continental Blockade

      Ultimately China’s home-grown semi-conductor capability will be an existential threat in 20 years or so. This sort of stupidity generates that - whilst a country has capability - hell even North Korea has ICBM’s when the effort/resources are provided.

      Just look at China and Solar PeV, batteries, EV’s etc ….

      **Note, please do not sent this wiki link to Brexiteer’s !!! !!! That’s just a different ballpark of stupidity.** ;-)

      1. Jellied Eel Silver badge

        Re: The Continental Blockade

        **Note, please do not sent this wiki link to Brexiteer’s !!! !!! That’s just a different ballpark of stupidity.** ;-)

        Nope. Stupidity would be assuming the EU has, or ever had the UK's interests at heart. Stupidity would be imposing sanctions and expecting any difference in outcome from Napoleonic times.

    2. Bebu Silver badge

      Re: The Continental Blockade

      I vaguely recall the Napoleonic blockade was a (indirect?) cause of the 1815 Corn Laws, that caused so much suffering amongst the agrarian poor, and which which William Cobbett railed against during his life. Given said laws weren't repealed until after his death (1838) that is a whole generation of misery which probably propelled many into the satanic mills of the industrial revolution. As well as a large number being awarded a one way trip to Botany Bay.

      History casts a long shadow and I suspect much of what is wrong in the UK today can be traced back to this time.

      From afar England looks totally fubar-ed and one would have to be a Faredge brexiteer not to admit some truth in that observation.

  6. Esoteric Eric

    Because China is only good for Slave Labour

    Can't have them actually competing with the West.

    Acceptable when we are using them as slaves though.

    1. Version 1.0 Silver badge

      Re: Because China is only good for Slave Labour

      Companies in the West, starting about 20 years ago, moved a lot of component and device manufacturing to China to make more money every year - and over time China started to make a lot more money from these Western actions so complaining about China's actions is just ignoring that companies were only paying attention to money "NOW" - not thinking about what might happen in future.

      Did China work out what the West was doing and copy it, is the West now fighting its' stupid past profit decisions? If China had originally moved its component construction to the West, would the West have started copying the Chinese work to make more money in the West?

      1. TheInstigator

        Re: Because China is only good for Slave Labour

        "If China had originally moved its component construction to the West, would the West have started copying the Chinese work to make more money in the West?"

        No - because Westerners are the best example of humanity and civilisation and as such are above such behaviour. You should be ashamed at yourself for thinking otherwise

  7. martinusher Silver badge

    Stealing IP?

    This is another way of saying "they read research papers and patents". Since "they" write a lot of papers and file a whole lot of patents these days you could say that the trade is two way.

    The problem we've got with China isn't that rather dumb description of "slave labor", "party member", "stolen IP" trope that keeps getting repeated. The problem is that there's an awful lot of them, many are really well educated (and smart), they have developed a national infrastructure that allows living costs to be maintained at a reasonable level and there's money available for investment. They also tend to be rather entrepreneurial --- many of them I've worked with are always looking for opportunities. (I live in California, BTW, and I've spent decades working in the startup culture so I know how these things work.) So the fundamental problem is simply that they're beating us at our own game. Our response should be to up our game, we should be able to do this, but entrenched interests would rather capture our government and use it to try to beat them down. This just will not work.

    (I wish we'd get out of the habit of referring to anyone who's not against us as 'allies', BTW.)

    1. TheInstigator

      Re: Stealing IP?

      @martinusher That's why I think war is the answer - either wipe them out or subjugate them - I've noticed that If you look at countries that the West gets along with - they've either been beaten in a war in the past or are subservient to any wishes & desires that the West has. If the Chinese are more clever then dumb them down - don't educate them, force them into camps etc

      My question to you - is when you see an entrepreneurial Chinese person (say a Chinese person born and brought up in the West), do you regard them as Chinese or American? Or should they be ringfenced/ostracized immediately and permanently because of their race?

      Or should they be sent "back" to China to commit some form of sedition against China before being allowed back in the West to prove their loyalty? Or maybe visit China, wear a bang bang vest and try to stand next to Xi?

      Also - what if China started doing this to all non Chinese - that would be bad right?

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