Four major new 12-inch fabs are under construction or recently completed, in Shanghai (Lin-Gang), Shenzhen, Beijing, and Tianjin, including an $8.87 billion facility , collectively targeting approximately 340,000 wafer starts per month of new 28nm-and-above capacity.
Export controls from the U.S., the Netherlands, Japan, and Taiwan constrain SMIC's ability to scale its advanced nodes. The company has been on the U.S. Entity List since December 2020, blocking access to ASML EUV scanners and progressively tightening DUV and etch equipment supply.
Taiwan added SMIC and Huawei to its own export-control blacklist in June 2025, requiring permits for high-tech equipment shipments. Although it was reported back in August that SMIC planned to double its 7nm capacity in 2026, the company remains constrained by tooling access: analysts estimate SMIC's advanced-node capacity will remain in the low tens of thousands of wafer starts per month rather than the hundreds of thousands that an unconstrained buildout would target.
SMIC's pricing reflects the competitive pressures in the mature-node segment , with the company having reportedly cut 28nm wafer prices by roughly 40% in early 2025, dropping from approximately $2,500 to $1,500 per wafer, before reversing course with a roughly 10% increase later in the year as utilization exceeded 95%.
After two years of price declines driven by Chinese capacity additions, the mature-node segment is reaching a floor. TrendForce reported in March that UMC, VIS, Powerchip, and Nexchip were preparing price increases of up to 10% from April through June this year, with the latter confirming a 10% hike effective from June.
One big factor is tightening supply alongside the cyclical recovery: TSMC has been reallocating 40-90nm production capacity toward CoWoS advanced packaging and silicon interposer fabrication for AI accelerators, reducing the available mature-node wafer supply from the world's largest foundry.
Demand from automotive (GloFo’s automotive revenue alone is on track for $1.5 billion in 2026), power management ICs for AI servers (typically manufactured on 28-55nm BCD processes), DDICs, and embedded flash microcontrollers continues to grow.
Whether these three foundries remain independent is an open question. The Project Ultron reports suggest that at least one party has considered consolidation, and the logic for doing so, at least in terms of economics, grows as margins compress and capex requirements grow.
While SMIC's expansion is state-backed and largely insulated from commercial return calculations, GloFo’s is tied to U.S. industrial policy and defense spending, and UMC's future hinges on whether 12nm FinFET with Intel can deliver the revenues that pure mature-node services cannot.
Luke James is a freelance writer and journalist.\u00a0 Although his background is in legal, he has a personal interest in all things tech, especially hardware and microelectronics, and anything regulatory.\u00a0 ","collapsible":{"enabled":true,"maxHeight":250,"readMoreText":"Read more","readLessText":"Read less"}}), "https://slice.vanilla.futurecdn.net/13-4-24/js/authorBio.js"); } else { console.error('%c FTE ','background: #9306F9; color: #ffffff','no lazy slice hydration function available'); } Luke James Social Links Navigation Contributor Luke James is a freelance writer and journalist. Although his background is in legal, he has a personal interest in all things tech, especially hardware and microelectronics, and anything regulatory.
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/semiconductors/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/semiconductors/the-trailing-edge-foundry-roadmap-examined#main
- https://www.tomshardware.com
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Informational only. No financial advice. Do your own research.