China’s production of key electronics declined so far this year despite a bullish rebound in the overall economy, showing the unevenness of the country’s recovery.
(Bloomberg) — China’s production of key electronics declined so far this year despite a bullish rebound in the overall economy, showing the unevenness of the country’s recovery.
Output of semiconductors fell nearly 15% in the first quarter from the same period last year, according to data released by the National Bureau of Statistics on Tuesday. Smartphones production shrank 13.8% in the same period, as local brands like Oppo, Vivo and Xiaomi Corp. struggled to shake off a sales malaise that’s affected Android handsets for over a year.
In addition to that domestic sales slowdown, trade tensions between Washington and Beijing are increasingly pushing electronics brands such as Apple Inc. to seek production locations outside outside of China. China’s tech manufacturing sector is facing rising competitive pressure from factories in India and Vietnam, which are among other Asian locations used by electronics assemblers to diversify the geography of their operations.
Read more: Apple Looks Beyond China in Bid to Remake Cook’s Supply Chains
The Biden administration’s curbs on trade with China’s semiconductor industry has also put a cap on Beijing’s chip ambitions, as local manufacturers are no longer able to access some technologies to fabricate cutting-edge silicon.
The output of microcomputers such as PCs slumped the most among the key electronics product classes disclosed in the report, and the downturn in electronics output dragged on the growth of China’s total industrial output, which climbed 3.9% in March. Gross domestic product expanded 4.5% in the January-to-March period from a year earlier.
Stock of Semiconductor Manufacturing International Corp., the biggest chipmaker in the country, dropped as much has 5.5% in Hong Kong following the data release. Smartphone maker Xiaomi fell as much as 2%.
–With assistance from James Mayger.
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