In 2023, China imported 479.5 billion chips, compared to about 540 billion in the previous year, a decrease of 11%. The value of imports in 2023 fell to $349.4 billion, compared to $415.6 billion in the previous year, a decrease of 15.4%.
The price drop is significantly higher than the volume drop, suggesting that the U.S. chips, which dominate the global chip market, are selling at a price cut for shipments after China reduced chip purchases.
In the past, China was the world's largest market for chips, and we accounted for 70% of the global chip market. China's reduction in chip purchases is mainly affected by the United States, but at the same time, American chip companies have also been greatly affected. For example, the price of a classic chip from Texas Instruments plummeted, from 70 yuan to 1 yuan.
Another example is Micron, whose revenue in the Chinese market fell from nearly $18 billion to several billion dollars, and in the first half of 2023, Micron has lost $4.2 billion. It also forced Aesthetics to voluntarily terminate a global lawsuit with a Chinese company in the second half of last year. At the same time, Micron also sent high-level officials to visit the mainland's commerce minister, hoping to increase investment in the Chinese market in the future.
These actions may seem like a remedy to foreign companies, but it is difficult to say what effect they will actually have. Because many facts in the past have shown that all limitations will eventually become our breakthrough goals.
Taking the automobile industry as an example, for a long time in the past, we wanted to develop the automobile industry and allow foreign-funded automobile enterprises to enter the mainland in the form of joint ventures and exchange the market for technology. But it backfired.
When foreign countries were still stuck in the stereotype that China could not close the distance in the automobile industry, they suddenly found that China had already achieved corner overtaking in the manufacture of new energy vehicles and became a global leader.
Driven by new energy vehicles, China's automobile exports have surpassed Japan's. At present, it occupies the position of the world's largest exporter. BYD, the continent's auto brand, has surpassed Tesla in sales of new energy vehicles in a broad sense and electric vehicles in a narrow sense.
A similar situation will occur in the chip industry. It's clear that this market is changing dramatically.
Foreign media may only focus on the decline in China's imports, thinking that the restrictions have taken effect. But in fact, the various products produced in China that require the use of chips have not been significantly reduced, so there is only one possibility, that is, the chips we need have gradually become self-sufficient.
China used to be the world's largest market for chips, and it should still be the largest market in the future. But China used to be the world's largest importer of chips, but the future is not certain.
Recently, Nvidia discovered that the castrated version of AI chips, which was supposed to supply China specifically, was actually not popular. Perhaps it won't be long before foreign chip giants will find that the Chinese market has been filled with Chinese chip products.
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