By Li Panpan

(JW Insights) Feb 20 -- The business licenses of 5,746 chip-related enterprises in China were revoked or canceled in 2022, a 68% increase from 3,420 in 2021, the Chinese media outlet TMT Post reported on February 16.

In the first eight months of 2022, a total of 3,470 chip-related enterprises canceled their business licenses. More than 2,300 chip companies’ businesses were suspended or canceled in the last four months of 2022.

One of the reasons for the sharp decline is the slowdown in the global electronics industry. Continued US restrictions on semiconductor exports to China have also undermined the performance of Chinese companies and industry confidence.

Foundry leader SMIC reported on February 10 that its revenue in the fourth quarter of 2022 fell 15% from the previous quarter while operating profit attributable to the parent company fell 27.8% year-on-year.

An industry observer pointed out that it is not very accurate to judge the rise and fall of China's chip industry by the number of registered companies. Still, the figure provides a reference to see changes and trends in the industry.

iResearch’s recent report on Chinese semiconductor startups’ financing shows that, from 2014 to May 2022, a total of 865 investment and financing transactions occurred, with 64.2% in IC design companies.

However, whether it is ARM, the core architecture of mobile phone processors, ASML lithography machines, and TSMC's 3nm advanced process, China's chip industry has to rely on the technology and products of international companies, said the TMT Post report.