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China’s Chip Output Shrinks as Lockdowns Hurt Production

  • Shanghai lockdown puts country’s chip supply chain at risk
  • Weakening smartphone demand could further hurt chipmakers

China’s quarterly production of semiconductors shrunk for the first time since early 2019 as consumer electronics demand softened and Covid-triggered lockdowns in regions including Shanghai disrupted output.

Output of integrated circuits dropped 4.2% in the first three months of the year as chipmakers reported a steeper decline in March, according to data from the National Bureau of Statistics. It was the worst quarterly performance since the first quarter of 2019 when the country’s chip output slumped 8.7%.