China’s semiconductor industry has gone through a period of unprecedented turbulence during 2023, recording a record number of company closures. Maybe it’s US sanctions, maybe investment mistakes. But during this year 11 thousand Chinese chip companies were closed, an absolute record. Even if the openings of companies are even greater.
Chinese chips, almost 11 thousand companies closed during 2023
According to reports from the TMTPost newspaper (via DDay), 2023 marked a sad record with the closure of 10,900 companiesfigure ben higher than the 5,746 recorded in 2022. An average of approx 30 companies closed per day.
However, one must consider the 65,700 new chip companies during the same period. An increase of 9.5% compared to 2022. A flurry of openings and closings in the landscape of semiconductor companies in China.
There are many difficulties that led to the closures. Errors in supply and demand forecasts in previous years leading to overproduction of chips, generating an excess of unsold inventory. But also a global economy shaken by events such as the conflict in Ukraine and the increase in energy prices.
To these contributing causes, we add the US sanctionsstrengthened further in October 2023. This inevitably affected the smaller startupsleading to consolidation into larger entities and closures of those who have not been able to adapt.
They also demonstrate how competition in the semiconductor manufacturing sector is becoming increasingly fierce. With more and more smart objects and the focus on AI, next year could be equally dynamic.
