Hong Kong confirmed more than 6,000 cases in a single day! Chip trade suffers again

Latest update time：2022-02-21 15:24

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"The chip shortage continues, and the severe epidemic in Hong Kong has caused logistics disruptions. Delivery times have been repeatedly postponed, and customers have no choice but to cancel their orders." Chip trade practitioners expressed their anxiety about the epidemic in Hong Kong.

Latest epidemic

According to statistics from the Hong Kong Special Administrative Region Government's Department of Health's Center for Health Protection, as of now, Hong Kong has added about 3,600 confirmed cases of COVID-19 on the 18th, with about 7,600 preliminary positive cases . On February 17, the Hong Kong Special Administrative Region Government's Department of Health announced that 6,116 new cases of COVID-19 were confirmed on the 16th, of which 6,107 were local infections , setting a new high in this round of epidemic.

The epidemic prevention pressure in places like Shenzhen, which is adjacent to Hong Kong, has increased dramatically. On February 17, 11 cross-border truck drivers were found to be positive for nucleic acid at the Shenzhen Port. The 11 patients were the 56th to 66th positive cross-border driver cases detected at the Shenzhen Port since February 4.

The fifth wave of the epidemic in Hong Kong is coming with great force. There is a serious shortage of logistics vehicles and drivers between China and Hong Kong. The customs clearance efficiency of goods has been greatly reduced, which inevitably causes concerns among semiconductor practitioners.

(Photo source: South China Morning Post)

Customs clearance time extended, costs surged

Shenzhen and Hong Kong are closely connected, and cross-border truck drivers are an important link between Hong Kong and the mainland. According to official data, there are currently 13,655 cross-border truck drivers from Shenzhen and Hong Kong who are exempted from centralized quarantine measures for entry into Shenzhen, and a total of 17 dedicated transfer points have been set up for cross-border drivers to transfer vehicles with transfer drivers.

Against the backdrop of the worsening epidemic in Hong Kong, and the confirmed infection of a cross-border truck driver, Shenzhen has strengthened the fixed-point management of the "three points and one line" and relevant traffic nodes along the way (highway toll stations, highway service areas, work points, maintenance plants, parking lots, gas stations) between Shenzhen and Hong Kong cross-border truck drivers, set up special service facilities, and clarified protection requirements to ensure that cross-border drivers can implement full closed-loop operations after entering the country.

Hong Kong has always played an important role in the semiconductor trade, and many chip companies prefer to conduct import and export trade through Hong Kong channels. However, the logistics disruption caused by the epidemic may put some pressure on Hong Kong's import and export business in the short term .

The clearance time is extended

After the epidemic prevention was upgraded, cross-border goods needed to be disinfected layer by layer, and the entry process for cross-border drivers became more stringent, which naturally lengthened the logistics time. According to chip trade practitioners, "Logistics supply became tight on February 8, and the tension has gradually intensified in the past week (February 14). At present, it takes 3-5 days to declare goods from Hong Kong to Shenzhen, which is at least 1-2 days longer than before; the export express delivery time from Shenzhen to Hong Kong has increased from 2 days to 4-5 days."

Shipping costs surge

"Many cross-border drivers are unable to cross the border due to the outbreak in their Hong Kong residences, which directly leads to the problem of having vehicles but no drivers, resulting in the inability to start work. The loss of transportation capacity is too great and the transportation capacity is insufficient." Logistics company staff said that transportation costs have surged during this period. It is understood that before the outbreak of this round of epidemic, the freight forwarding company's transportation fee for a vehicle was about 1,000 yuan per time, and it has now increased to more than 5,000 yuan.

(Photo source: South China Morning Post)

Unique advantages of semiconductor trading center

Since 2013, my country's imports of integrated circuits have continued to rise, breaking historical records. In 2013, it exceeded US$200 billion for the first time, and in 2018 it exceeded US$300 billion.

The General Administration of Customs of China announced that in 2021, integrated circuits remained my country's largest import commodity, with an import value of 2,793.48 billion yuan (about 439.69375 billion U.S. dollars), a year-on-year increase of 15.4% (2,420.26 billion yuan in 2020), soaring by more than 370 billion yuan in one year. The number of integrated circuit imports reached 635.48 billion, a year-on-year increase of 16.9% (543.5 billion in 2020). In terms of exports, my country exported 310.7 billion integrated circuits in 2021, an increase of 19.6% over 2020, and the total annual amount was 992.96 billion yuan, an increase of 23.4% over 2020.

Hong Kong is a free trade port and has unique advantages in semiconductor import and export. First, semiconductor prices are sensitive to market demand and supply, so international semiconductor transactions are based on relatively stable US dollars. Hong Kong can trade directly in US dollars, which lowers the threshold for semiconductor transactions .

Secondly, compared with the mainland, Hong Kong has a higher tax rebate rate and other favorable import and export policies, and customers have a strong desire to reduce the unit price of semiconductors. In addition, Hong Kong has convenient air transportation . The 2018 World Airport Cargo and Mail Throughput Top 20 Rankings show that Hong Kong, China, ranks first in the world with a cargo and mail throughput of 5.121 million tons.

Many products from the United States, Japan, South Korea, Europe and Taiwan are re-exported to customers in mainland China or around the world through Hong Kong. Because it is close to the Shenzhen port, many international manufacturers such as WeEn Semiconductor have built logistics centers in Hong Kong , which can quickly deliver goods to the mainland market while reducing costs.

(Photo source: China Aviation Network)

In recent years, Hong Kong's role as a cargo transit point for mainland my country has been further strengthened, with its total foreign trade reaching a record high in 2021. In December 2021, Hong Kong's overall export and import values increased by 24.8% and 19.3% respectively.

In addition, according to Hong Kong Commercial Daily, the electronics industry is Hong Kong's largest export-earning industry, accounting for 71.8% of Hong Kong's total exports in 2020. The industry's exports are mainly re-exports, and most of them are high-tech products, especially telecommunications equipment, semiconductors and computer-related products.

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