In Q1 2023, China experienced a nearly 15% decline in semiconductor production and a 13.8% drop in smartphone production, primarily affecting local brands like Oppo, Vivo, and Xiaomi. This decline in electronics production contrasted with a 4.5% GDP growth and 3.9% industrial output increase in March. The US export control regime on semiconductor equipment and increased competition from factories in Vietnam and India are contributing factors to China’s challenges.

Now according to recently released data by the Ministry of Industry and Information Technology (MIIT) indicates a notable recovery in the electronic manufacturing sector in China from January to August. Key findings from the report reveal:

Chinese Smartphone Production

Chinese Electronic Manufacturing Sector Is Recovering Slowly

Steady Improvement in Production: Electronic manufacturing enterprises contributed to a 0.9% year-on-year increase in value added, showing improvement compared to the first seven months.

August’s Strong Performance: August witnessed a remarkable 5.8% year-on-year increase in value added by the electronic information manufacturing industry.

Mobile Phone Production: Despite a slight decline of 0.9%, mobile phone production reached an impressive 935 million units, with smartphones contributing 679 million units but experiencing a 7.5% decline.

Chinese Electronics Production

Decline in Microcomputer Devices and Integrated Circuits: The production of microcomputer devices fell by 21.7%, and integrated circuits saw a 1.4% decline.

Mixed Export Picture: The electronic information manufacturing sector faced an 8% decline in export delivery value, though it improved slightly compared to the earlier part of the year. Exports of laptops, mobile phones, and integrated circuits declined by 21.7%, 10.9%, and 6.2%, respectively.

Financial Performance: The industry generated an operating revenue of 9.21 trillion yuan ($1.2 trillion), with a 3.5% year-on-year drop, which showed signs of improvement. Costs decreased by 3%, totaling 8.06 trillion yuan ($1.12 trillion), and profits stood at 354.7 billion yuan ($49.6 billion), reflecting a substantial decrease of 20.6% but improving over the previous months.

China’s electronic manufacturing sector has displayed resilience and a positive trajectory despite facing challenges during the first eight months of the year. While there have been declines in certain areas, such as smartphone production and exports, the overall industry has shown signs of recovery and growth, with August particularly standing out as a strong month. The sector’s ability to adapt and improve, along with a potential boost in the coming months, indicates a promising future for China’s electronic manufacturing industry.

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