[News] China Accelerates U.S. Chip Stockpiling ahead of Trump’s Second Term as October Imports Surge 60% YoY

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Ahead of Trump’s inauguration in late January, 2025, China seems to be intensifying its efforts to amass semiconductors from the U.S., as the country prepares for the possibility of heightened sanctions afterwards. According to a report by South China Morning Post, China imported USD 1.11 billion of microchips from the U.S. in October, marking a 60% year-over-year hike.

Citing customs data released earlier, the report notes that in the first ten months of the year, China imported USD 9.61 billion worth of microchips from the U.S., marking a 42.5% year-on-year increase.

It is worth noting that Beijing’s demand for US semiconductors has soared in recent months. Since June, China’s monthly chip imports from the U.S. have consistently exceeded USD 1 billion, according to the report.

The South China Morning Post report also suggests that among the nine categories of microchips imported from the U.S., China has concentrated its efforts on acquiring CPU-based processors and controllers, along with chips specialized for storage and signal amplification. The situation, in a way, aligns with China’s ambition on AI.

However, China continues to grapple with obstacles in advancing its chip technology, as a recent Bloomberg report indicates that Huawei’s efforts to develop more advanced AI chips for have faced significant setbacks due to U.S. sanctions, making it unable to match the performance of even older NVIDIA products, lagging at least three generations behind.

This is because Huawei remains dependent on 7nm architecture for its upcoming Ascend processors, as U.S. technology restrictions block the company from accessing more advanced lithography equipment, such as ASML’s EUV tools.

Notably, according to a previous Nikkei report, citing data from the Semiconductor Equipment and Materials International (SEMI), despite US sanctions preventing China from acquiring advanced EUV lithography equipment from ASML, China’s spending on chip manufacturing equipment has reached USD 25 billion in the first half of this year, exceeding the combined total of Korea, Taiwan, and the US.

Citing the remarks by Liang Yan, a U.S. scholar, the South China Morning Post report indicates that Trump will undoubtedly implement tech restrictions in his second term, but it remains unclear whether the new administration will take a more selective and targeted approach or involve broader sanctions.

Nevertheless, an expansion in US chip production could also create pressure to maintain strong demand for semiconductors. According to South China Morning Post, as China represents approximately one-third of global semiconductor demand, which is crucial for chip production, Trump will need to balance these factors while making decisions.

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