[News] Over 14,000 Chinese Chip Firms Reportedly Shut down in 2024 amid Accelerating Reshuffle

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As 2024 draws to a close, how the chip industry in China has been developing amid the heating chip war attracts attention. According to reports from Commercial Times and anue, citing Chinese media outlets ijiwei and QQ News, the wave of chip company closures has continued in China, with over 14,000 companies shutting down in 2024.

The reports further note that the number of chip companies in China that went bankrupt or deregistered has been surging since 2022. In 2023, this number reportedly reached 10,900, and as of December 5, 2024, 14,648 chip-related companies in China closed this year, leaving the market in disarray.

The reports attribute the scenario to weaker-than-expected growth in markets like automotive and industrial sectors, as well as the export curbs on China’s semiconductors.

Notably, despite the bleak market, the enthusiasm of new entrants seems relatively unfazed. As per the data cited by the reports, as of December 13, 2024, 52,401 new chip-related companies were registered in China. While this is a decline from roughly 66,000 registrations in 2023, it still implies the resilient passion among Chinese chip startups, the reports note.

According to anue, these new players are primarily focusing on consumer electronics, automotive, and AI-related fields, as this trend is further supported by the robust growth of domestic leaders like Huawei’s HiSilicon, Will Semiconductor, Wingtech and GigaDevice.

However, the Commercial Times report warns that the wave of closures actually reflects the beginning of industry restructuring and internal optimization, adding that the entire industry may take about two years to complete the reshuffling.

In addition to the intensifying industry competition, support from investors and local governments for chip design firms is gradually weakening, making it more difficult for startups to secure funding, attract top talent, and improve R&D and operational capabilities, the report suggests.

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