In the first eight months of this year, 3,470 semiconductor chip companies in China went bankrupt. 

Meanwhile, China’s integrated circuit (IC) output in August fell 24.7% year-on-year, the most significant monthly decline on record.

China’s microcomputer output also fell 18.6%, the most significant drop since December 2015. Previously, in July, China’s chip output fell 16.6% year-on-year.

According to South China Morning Post, in the past two years, China’s public and private sectors have begun to make large-scale investments to achieve the Chinese regime’s goal of semiconductor self-sufficiency.

However, CCP’s lockdown for fighting COVID, lack of electricity, and internal weaknesses have made it difficult for Chinese chip companies.

Besides, tense relations between Beijing and Washington make China’s chip industry more difficult.

The U.S government has begun to impose more restrictions on the export of technology products that could help China develop chip products.

Reuters reported last week that the Biden administration plans to expand restrictions on AI chip exports to China.

Sources told Reuters that Washington has been reaching out to its allies to ask them to assure that China cannot import chip technology from foreign companies.
Jim Lewis, a technology expert at the Center for Strategic and International Studies, said, “The strategy is to choke off China and they have discovered that chips are a choke point. They can’t make this stuff, they can’t make the manufacturing equipment.”

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