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BEIJING, February 16 (TMTPOST) —— The business licenses of 5,746 chip-related enterprises in China were revoked or cancelled in 2022, a 68 percent increase from 3,420 in 2021, according to exclusive data provided by Qichacha on Thursday.

At present, there are over 170,000 chip-related enterprises whose business, enterprise names or brand names are related to chips.

In the first eight months of 2022, China cancelled 3,470 chip-related enterprises’ business licenses. In the four months from September to December, more than 2,300 chip companies’ businesses were suspended or canceled.

The sharp decline in the number of Chinese chip enterprises in 2022 was mainly due to the recession and industrial chain transformation of the global chip industry.

Since the beginning of 2023, chip and semiconductor companies have released their financial results for last year. As for foreign companies, Intel and Samsung, two of the biggest IDMs (integrated design and manufacturing) companies, performed poorly in terms of business conditions. Regarding Chinese companies, 49 chip-listed companies expect a year-on-year decline in net profit and have seen a sharp downturn in performance and stock price, according to earnings forecasts for 2022 released by listed semiconductor companies.

At the same time, behind the forecast loss of listed semiconductor companies in 2022 was also asset impairment and continued investment in research and development expenses. Looking ahead to 2023, upstream capital expenditure on the supply side is expected to be reduced significantly and inventories will gradually decline.

Moreover, continued US restrictions on semiconductor exports to China have greatly undermined the performance of chip companies and industry confidence. Foundry leader Semiconductor Manufacturing International Corp (SMIC) reported on last Friday that its revenue in the fourth quarter of 2022 fell 15 percent from the previous quarter while operating profit attributable to the parent company fell 27.8 percent year-on-year.

Wei Shaojun, director general of the Design branch of the China Semiconductor Industry Association, said that the only way to keep China's chip industry standing the test of time with high competitiveness is to get rid of external dependence on the technology by setting China’s own product system and technical standards.