By Gabby Chen

(JW Insights) Apr 20 -- China's integrated circuit (IC) output fell nearly 14.8% to 72.2 billion units in the first quarter from the same period last year, according to data released by its National Bureau of Statistics (NBS) on April 18.

The country's production of key electronics declined so far despite a rebound in the overall economy, showing the unevenness of the country's recovery, said a report by Bloomberg.

The output of microcomputers such as PCs slumped the most among the key electronics product classes disclosed in the report, and the downturn in electronics output dragged on the growth of China's total industrial output, which climbed 3.9% in March, with GDP up 4.5% to RMB28,499.7 billion ($4,145.5 billion) in the January-to-March period, compared to the same period last year.

In March, the production of microcomputer equipment saw a decline of 21.6%, with a further drop of 22.5% in the first quarter, despite the recovery of most of the industrial output, according to NBS.

A recent report by Canalys shows that the global smartphone market experienced a fifth consecutive quarter of decline, falling by 12% year-on-year in Q1 2023. Chinese brands like Oppo, Vivo and Xiaomi struggled to shake off a sales malaise that's affected Android handsets for over a year.

In addition to that domestic sales slowdown, trade tensions between China and the US are increasingly pushing electronics brands such as Apple to seek production locations outside of China. China's tech manufacturing sector is facing rising competitive pressure from factories in India and Vietnam, which are among other Asian locations used by electronics assemblers to diversify the geography of their operations.

The Biden administration's curbs on trade with China's semiconductor industry has also put a cap on China's chip ambitions, as local manufacturers are no longer able to access some technologies to fabricate cutting-edge silicon, said the Bloomberg report.