In recent reports from the Taiwan Electronic Times, it has been highlighted that three major semiconductor foundries in mainland China—SMIC, Hua Hong Semiconductor, and Huali Microelectronics—are actively expanding their chip manufacturing capabilities. This growth aligns with the Chinese government’s broader strategy to develop a self-reliant semiconductor industry. In 2016, China's domestic chip production rate stood at just 26.2%, but officials have set an ambitious target of increasing this to 70% by 2025. This goal signals a significant push toward boosting local manufacturing capacity.
Currently, Chinese foundries are still behind global leaders like TSMC and Samsung. However, companies such as TSMC, GlobalFoundries, and United Microelectronics have established or are building 12-inch wafer fabrication plants in mainland China. These facilities use larger wafers, which improve production efficiency and reduce costs. Despite these efforts, Chinese manufacturers are focusing on less advanced markets, such as automotive electronics, where cutting-edge technology is not always required.
According to the Taiwan Electronics Times Research Department, the expansion of the three major Chinese foundries will largely depend on the domestic market demand. While the global foundry market is dominated by TSMC, which holds about half of the market share, the company remains a key supplier for Apple. Recent years have seen increased competition from Samsung, putting pressure on TSMC to maintain its edge.
In semiconductor manufacturing, the “nanometer†scale is a critical factor. The smaller the line width, the more transistors can be packed onto a chip, leading to better performance and lower power consumption. TSMC recently announced plans to build the world’s first 3nm chip factory, aiming to start production in 2020. Meanwhile, both TSMC and Samsung are currently using 10nm processes for their latest chips.
The level of nanometer technology used in mainland Chinese foundries remains unclear. However, it was reported last year that SMIC planned to begin producing chips using a 14nm process in 2019. This suggests progress, but still places China behind the global leaders in terms of advanced manufacturing.
On the design side, mainland China has over 1,400 chip design companies, according to industry data. These firms generated nearly $30 billion in revenue last year. Some smartphone manufacturers are starting to adopt processors designed by local companies, but high-end chips are still primarily supplied by global giants like Qualcomm and MediaTek. As China continues to invest in its semiconductor sector, the long-term goal is to reduce dependency on foreign suppliers and build a more sustainable and competitive industry.
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