In a recent report by the Taiwan Electronic Times, it was highlighted that China is home to three major semiconductor foundries: SMIC, Hua Hong Semiconductor, and Huali Microelectronics. These companies are actively expanding their chip manufacturing capabilities as part of the country’s broader push to strengthen its domestic semiconductor industry.
The Chinese government has set an ambitious target for the sector, aiming to increase the local chip production rate from 26.2% in 2016 to 70% by 2025. This goal reflects the growing importance of semiconductors in the national economy and the need for self-reliance in critical technology areas.
Currently, Chinese foundries still lag behind global leaders like TSMC, UMC, and GlobalFoundries. However, some of these companies have established facilities in mainland China and are working on building advanced 12-inch wafer fabrication plants. The larger 12-inch wafers allow for higher efficiency and lower costs per chip, making them a key advancement in the industry.
Due to technological limitations, many Chinese foundries are focusing on less demanding markets, such as automotive electronics, which do not require the most advanced manufacturing processes. This strategy allows them to gain experience and gradually build up their capabilities.
According to the Taiwan Electronic Times Research Department, the growth of China’s three major foundries will largely depend on the domestic market demand. As the country increases its chip production, it could reduce its reliance on foreign suppliers.
Globally, TSMC remains the dominant player in the foundry market, accounting for about half of the industry's capacity. It is a key supplier for Apple, with a significant portion of its business coming from the tech giant. Samsung, however, continues to exert strong competition, pushing TSMC to innovate and maintain its edge.
In semiconductor manufacturing, the “nano†scale is a crucial metric. Smaller line widths allow for more transistors per unit area, leading to better performance and lower power consumption. Recently, TSMC announced plans to build the world’s first 3-nanometer chip factory, with production expected to begin in 2020. Both TSMC and Samsung are already using 10-nanometer processes for their latest chips.
Meanwhile, the level of nanometer technology used in mainland China’s semiconductor factories remains unclear. In 2019, there were reports that SMIC had started using a 14-nanometer process for chip production, marking a step forward in the country’s capabilities.
China also has a growing number of chip design companies. According to data from industry organizations, there are nearly 1,400 such firms, and their total revenue reached $30 billion last year. Some smartphone manufacturers are now experimenting with locally designed processors, though mainstream chips are still dominated by companies like Qualcomm and MediaTek.
As the industry evolves, China's focus on both manufacturing and design is likely to shape the future of the global semiconductor landscape.
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