As the US has expanded domestic semiconductor manufacturing, China witnessed its biggest-ever monthly decline in chip manufacturing in August.

The production of integrated circuits (ICs) slumped 24.7 percent to 24.7 billion units in August, marking the largest single-month decrease since 1997, according to the South China Morning Post.

This is the second consecutive month of decline for chip manufacturing. In July, the output nosedived 16.6 percent to 27.2 billion units.

Local output of microcomputers fell 18.6 percent to 317.5 billion units in August.

In August, domestic manufacturing activity contracted for the first time in three months, the report mentioned.

A record 3,470 chip-making companies went out of business in the first eight months of the year, according to statistics from business database platform Qichacha.

The slump in chip production in China is coming as both India and the US ramp up efforts to bolster local chip manufacturing.

US President Joe Biden has signed into law the Chips and Science Act, which provides nearly $52 billion in semiconductor production incentives.

Intel has kicked off work on the new $20 billion semiconductor plant in the Ohio state in the US.

Samsung has floated an idea of investing nearly $200 billion to build 11 more chip plants in the US over the next two decades.