China will produce fewer chips in 2025.

Purchases of semiconductor manufacturing equipment in China are expected to decline this year due to an oversupply of capacity and U.S. sanctions, which will impact the volume of finished products.

According to Reuters, this information has been reported.

As per the Canadian research firm TechInsights, China has been the largest buyer of semiconductor manufacturing equipment over the past two years. The country acquired equipment worth $41 billion, accounting for 40% of global sales in 2024.

Reuters anticipates that this year expenditures will drop to $38 billion, representing a 6% decrease compared to 2024. Concurrently, the share of global purchases will fall to 20%—the first decline since 2021.

The publication notes that China primarily purchased equipment for stockpiling, as U.S. sanctions aim to limit Beijing's ability to access and produce semiconductors that could facilitate the development of artificial intelligence for military applications.

Background. Previously, Mind reported that Biden's administration developed sanctions that would cut Russia and China off from advanced chips for artificial intelligence. This provides the U.S. with a unique opportunity to control the global development of AI and "pull both companies and countries out of Beijing's orbit."