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China witnessed its largest decline in chip manufacturing last month, with India and the US doubling down on local manufacturing of semiconductors. The shrink was credited to the pandemic-induced restrictions and dwindling demand.
The production of integrated circuits (ICs), as reported in the South China Morning Post, sank 24.7% year-on-year to 24.7 billion units—marking it as the largest single-month decrease since 1997. China witnessed a decline for the second consecutive month in chip manufacturing—with the output nosediving from 16.6% to 27.2 billion units as of July 2022.
The local output of microcomputers fell 18.6% to 317.5 billion units in August 2022—noting a contraction in the domestic manufacturing activity for the first time in three months.
A report by the India Electronics & Semiconductor Association (IESA) and Counterpoint Research shows that the Indian semiconductor component market is likely to reach $300 billion in cumulative revenues by 2026. With initiatives such as ‘Make in India’ and production-linked incentive (PLI) schemes, the country is expected to witness a boost in local sourcing of semi-components in the coming years.
Under the PLI scheme, the Indian government announced an investment of INR 76,000 crore separately for the development of a semiconductor and display manufacturing electronics ecosystem.