In 2020, Chinese foundry Semiconductor Manufacturing International Corp. (SMIC) was slapped with export restrictions by the U.S. Department of Commerce (DoC) to curb the semiconductor manufacturer from gaining ground on competitors.
Yet nearly four and a half years later, the company continues to expand production capacity with a new land buy that suggests preparations for future capacity expansion. The plot land is adjacent to Semiconductor Manufacturing Beijing Corp., which is backed by SMIC and a Chinese investment fund. The site is likely to focus on the production of 12-inch semiconductor wafers and packaging.
Chinese foundries' capital expenditures are likely to exceed market expectations, according to the market research firm TrendForce. This trend is driven by the surge in demand for AI inference models fueled by DeepSeek and a shift in orders to Chinese foundries following TSMC’s supply restrictions in China. This could potentially lead to further expansion, TrendForce said.
Growing capacity
According to TrendForce, Chinese foundries' mature process capacity is likely to surpass 25% by the end of 2025 with 28 nm/22 nm processes seeing the largest additions. Specialty process nodes in high-voltage platforms will also grow this year after entering mass production in 2024.
Faced with the inability to get the capital equipment needed to produce advanced nodes due to export restrictions, Chinese foundries started turning to mature process technologies including SMIC, HuaHong Group and Nexchip.
While not as flashy or headline-making as advanced process nodes, mature lines are still needed for semiconductors like driver ICs, image sensors, power discretes and more. This will likely increase the dependency on Chinese foundries even more in these sectors, TrendForce said.
