China’s chip exports surge 73% as AI demand fuels semiconductor growth

China’s integrated circuit exports jumped 72.6 per cent to US$43.3 billion in January and February, data from the General Administration of Customs (海关总署) show. That growth far outpaced China’s overall export rise of 21.8 per cent in the same period. By volume, IC shipments rose 13.7 per cent to 52.5 billion units. What’s driving the jump? Largely domestic AI demand and state-led industrial policy.

Policy push and market dynamics

Beijing’s intensified “whole-nation” push to build semiconductor self-reliance is a central factor. The policy bundles subsidies, procurement preferences and R&D support to expand local capacity and reduce exposure to Western controls. At the same time, imports climbed: chip volumes rose 9 per cent to 9.1 billion units and import value jumped 39.8 per cent to US$78.2 billion in the same two-month window, underscoring China’s continuing reliance on some foreign high-end components even as domestic production scales up.

Geopolitics and supply constraints

Geopolitical tensions matter. It has been reported that US officials are considering curbs on sales of Nvidia H200 GPUs to Chinese firms — reportedly limiting purchases to 75,000 chips per company — a move that would constrain access to a class of processors widely used to train large AI models. Western export controls have been a motivating factor behind China’s accelerated investment; but they also complicate the path to producing the most advanced chips domestically.

China’s surge in chip exports is both an economic story and a geopolitical one. Rapid growth signals strong demand and improving industrial heft. But can state-led investment and import substitution close the gap on cutting-edge semiconductor technologies under sustained export controls? The next quarters will tell.