The Foundry Wars are shifting, and China may be about to take the crown.
In the global semiconductor arena, power is no longer just about nodes—it’s about capacity. And while U.S. sanctions and technology bans continue to slow China’s access to bleeding-edge lithography tools, they haven’t stopped the country from building chip factories. A lot of them.
According to a new report by market research firm Yole Group, China is poised to become the world’s largest chip manufacturing hub by 2030, with a projected 30% share of global foundry capacity. That would eclipse Taiwan (currently 23%) and South Korea (19%) and even put pressure on the U.S., which, despite driving 57% of global demand, holds just 10% of wafer capacity.
Let’s be clear: this is a tectonic shift in the silicon power map—one the West can no longer ignore.
China’s Chip Climb: Capacity First, Nodes Second
While the West obsesses over 3nm bragging rights, Beijing is playing a different game—volume. With 18 new fabs built in 2024 alone and more already under construction, China has expanded its monthly output to nearly 9 million wafers, and that number is forecast to exceed 10.1 million in 2025.
That’s not cutting-edge chip technology, but it’s cutting-edge strategy. Mature nodes still dominate markets like:
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Automotive
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Power management
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5G infrastructure
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IoT
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Display drivers
And as ASML’s own CEO recently admitted, Europe depends on China for these legacy nodes. So, while the West sanctions high-end EUV lithography, China is quietly cornering the market for the rest.
U.S. Curbs, China’s Curveball
Despite the U.S. applying export controls and pushing TSMC, Samsung, and Intel to onshore their fabs, China is surging ahead where restrictions don’t apply.
Beijing’s strategy? Massive government subsidies, state-directed fab expansion, and strategic independence. Even if SMIC can’t yet mass-produce 5nm chips, it has already taped out 6nm, and its ambitions go far deeper—down to process tech, EDA tools, and domestic lithography equipment.
At the same time, Chinese foundries are flooding mature node markets with capacity that:
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Is cheaper to operate
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Scales faster
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Is politically insulated from U.S. leverage
So, while the U.S. builds its fabs amid Arizona heat and political friction, China is laying concrete, installing tools, and moving wafers—right now.
Why the West Shouldn’t Laugh Off “Old” Nodes
The word “mature” might suggest “obsolete,” but don’t be fooled—mature node chips are mission-critical.
From automotive ECUs to mobile RF chips, smart home gadgets, and even some AI accelerators, not everything requires 3nm. And China’s growing dominance in these essential markets is giving it increasing leverage, especially as:
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The EU battles EV chip shortages
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U.S. firms outsource power management ICs
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Developing nations scale up smart device production
In a world starved for semiconductors, the country that controls volume—not just edge—controls the narrative.
A Race of Two Tracks: Volume vs. Vision
Let’s break down the new global chip race:
| Metric | The U.S. | Taiwan | South Korea | China |
|---|---|---|---|---|
| Advanced Node Leadership | ✅ | ✅ | ✅ | 🚧 (restricted) |
| Fab Construction Speed | ❗ (slow, political) | ⚠️ (at capacity) | 🏗️ (steady) | 🚀 (explosive) |
| Mature Node Dominance | ❌ | ⚠️ | ⚠️ | ✅✅✅ |
| Long-term Foundry Capacity | 🟡 | 🔺 | 🔺 | 🔥 |
China knows it may never catch up to TSMC at 2nm. But if it builds the world’s largest fleet of mature-node fabs, it can control the bottom half of the semiconductor pyramid, where unit volume rules.
Will Node Supremacy Even Matter in 2030?
A deeper question looms: Will “leading-edge” nodes even be where the real power lies by 2030?
With chipset architectures, domain-specific accelerators, and AI-in-memory advances, the future might be less about shrinking transistors and more about scaling systems. And in that world, capacity + ecosystem + self-sufficiency = supremacy.
And if that’s the new metric, then China’s foundry ecosystem might already be ahead of the curve.
A Silicon Shockwave Incoming
Let’s not sugarcoat it. If China hits 30% global capacity by 2030, it will mark a generational shift in industrial power. The U.S. might still lead in technology, but China will own the real estate of chip manufacturing. Taiwan’s dominance will be under pressure, South Korea will need to pick sides, and the U.S. will scramble to close the gap with a patchwork of onshoring efforts.
