Global Computing Power Demand Reshapes the Chip Trade Landscape: An In-Depth Analysis of China's IC Export Flows in 2026
“China's IC exports surged in 2026, driven by global AI investment, with ASEAN overtaking Europe and the US as the largest export market and Vietnam becoming the top single destination. The growth is price‑led rather than volume‑driven, and reflects a two‑way trade flow where high‑end chip imports are processed and re‑exported globally.”
In 2026, the global semiconductor trade landscape is undergoing a profound transformation. The latest data released by the General Administration of Customs of China on August 7 shows that China's exports grew by 23.9% year-on-year in July, with high-tech product exports rising by over 50%, contributing nearly 60% of the export growth. The driving force behind this surge is not traditional exports like garments and footwear, but high-tech products led by integrated circuits (ICs) – July IC exports skyrocketed by 116.57% year-on-year, reaching a single-month export value of $38.74 billion. In the first seven months of the year, cumulative IC exports reached $216 billion, a staggering 99.5% year-on-year increase – meaning that in just seven months, China exported more than the entire previous year, plus an additional $14 billion.
This explosive growth in chip exports is fundamentally reshaping the global semiconductor trade flow landscape.
I. Global AI Investment Boom Is the Core Driving Force
The fundamental driver behind this round of chip export growth is the sustained global surge in AI infrastructure construction. Large language model training requires GPUs; GPUs require advanced packaging; advanced packaging requires chips; and on the supply side, China's mature process node capacity has been perfectly positioned to capture this demand surge.
From a broader perspective, global semiconductor sales reached $791.7 billion in 2025, up 25.6% year-on-year, setting a new all-time high. The World Semiconductor Trade Statistics (WSTS) forecasts that the global semiconductor market is expected to surpass $1 trillion in 2026. PwC's Semiconductor and Beyond – Global Semiconductor Industry Outlook 2026 report also notes that global semiconductor revenue will exceed $1 trillion, but export controls, critical material restrictions, and shifting trade alliances are redefining the global semiconductor landscape.
Against this backdrop, the surge in China's IC exports is no accident. In the first quarter of 2026, China's IC exports reached $72.47 billion, up 77.5% year-on-year; in the first half of the year, exports reached $177.28 billion, a 96% year-on-year increase; June's single-month export growth hit 121.9%, marking six consecutive months of accelerating growth. July maintained this momentum with 116.57% year-on-year growth. ICs have become China's largest export commodity, accounting for 9.4% of total exports in June.
Notably, this export value surge is not driven by volume. Analysts point out that IC export volume grew only about 2.1% year-on-year, but export value nearly doubled – growth is primarily driven by rising prices. This indicates that China's chip exports are transitioning from a "low-price, high-volume" phase to a "value-driven" phase.
II. Trade Flows Are Being Reshaped: ASEAN Overtakes Europe and the US as the Largest Export Market
Changes in chip export flows are key to understanding the ongoing trade landscape restructuring.
ASEAN has become China's largest direct IC export market. In the first two months of 2026, ASEAN's share of China's IC exports reached 29.7%, with year-on-year growth of approximately 128%. Southern countries (Southeast Asia, Latin America, Africa, Russia, India, etc.) together accounted for about 39%, while Europe and the US combined accounted for about 25%. ASEAN, Hong Kong (China), and the EU contributed 4.1, 3.9, and 2.5 percentage points respectively to China's export growth in the first half of the year.
Vietnam is the largest single export destination. In the first quarter of 2026, Vietnam accounted for 13.21% of China's IC exports, making it the largest single destination. In May 2026, China's IC exports to Vietnam grew by 87.8%. Vietnam, Malaysia, Thailand and other countries have in recent years absorbed significant consumer electronics manufacturing capacity, creating strong demand for mature process node chips.
South Korea and Taiwan (China) remain key markets. In the first half of the year, China's IC export growth to South Korea reached 42.6%, and to Taiwan (China) reached 43.8%. This growth is closely tied to active intra-AI-industry-chain trade. At the same time, South Korea remains the largest source of China's IC imports – in the first half of the year, South Korea's semiconductor exports reached $192.4 billion, up 162.6% year-on-year. China imports large volumes of memory chips from South Korea for AI-related production, processes them, and re-exports them to global markets – a classic "intra-industry chain trade" pattern.
Hong Kong (China) remains an important transshipment hub. In May 2026, China's IC exports to Hong Kong grew by 132%. A significant volume of chips passes through Hong Kong for re-export to destinations worldwide, with Hong Kong playing an indispensable intermediary role.
Overall, China's chip export flows are shifting from traditional European and US markets to southern countries, with Southeast Asia at the core. This structural change warrants close attention from foreign trade companies.
III. Two-Way Flow: The Import Support Behind Surging Exports
It is worth noting that chip trade is not a one-way flow. In July, IC imports grew 71.1% year-on-year, with ICs accounting for 22% of total monthly imports. China imports large volumes of high-end AI chips from South Korea and Taiwan (China) – in the first half of the year, import values from both exceeded $100 billion ($138.6 billion and $133.2 billion respectively) – which are then processed, assembled, and re-exported globally as chips or finished electronic products.
This "import high-end chips → process and add value → export chips/finished products" model defines China's unique position in the global semiconductor trade – it is both a key supplier to global AI infrastructure and a major consumer market for high-end chips. In the first quarter of 2026, China imported 131.24 billion IC units worth RMB 633.91 billion; import volume grew 11%, but value grew 41.1% – price increases are also the dominant theme on the import side.
IV. Trends and Outlook
IC exports will maintain strong growth. The global AI arms race shows no signs of slowing, and chip demand will remain robust. ICs have become the core engine driving China's exports – in July, ICs and automatic data processing equipment combined for 92.7% year-on-year export growth, together contributing 8.4 percentage points to overall export growth.
Competitive pressure is also rising. Competition in the mature process node segment is intensifying, with Southeast Asian countries catching up. At the same time, variables such as export controls, critical material restrictions, and the restructuring of trade alliances continue to reshape the global semiconductor landscape.
Market diversification will continue. ASEAN has already overtaken Europe and the US as the largest export market, and this trend is expected to deepen further. Emerging markets such as the Middle East, Africa, and Central Asia are also releasing procurement demand, with Belt and Road countries becoming significant incremental growth sources.
Price-driven rather than volume-driven. The fact that value growth far outpaces volume growth signals that China's chip exports are undergoing a qualitative shift from "volume growth" to "value growth" – a reflection of the continuous improvement in China's chip industry in terms of technology and product value addition.
Implications for Foreign Trade Companies
For foreign trade companies focused on the chip and related industries, the current market landscape changes imply the following:
First, focus on high-tech incremental categories. ICs, 3D printers, industrial robots, and other exports are all in a period of rapid growth, and the window of opportunity remains open.
Second, pay attention to procurement demand from ASEAN and emerging markets. ASEAN has become the largest export market, and infrastructure development in emerging markets such as the Middle East and Africa is releasing significant procurement demand.
Third, manage currency risk effectively. With strong foreign trade growth and expectations of RMB appreciation, exporters should use tools such as forward settlement to lock in profits.
The changes in chip trade flows in 2026 reflect the profound reshaping of industrial division and trade patterns in the global AI era. For China's foreign trade companies, understanding these flow changes is the key to understanding the direction of the next wave of growth.
