China's mature chips to make up 28% of world production, creating oversupply — Western companies express concern for their survival

China
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Chinese legacy chipmakers and silicon producers are hitting the global market hard, and Western competitors are struggling to keep up with the intense supply and low prices. Industry speculators are predicting a "China shock" for chipmaking, and some companies already feel the squeeze.

The production of mature process nodes, typically above 20nm, is the lifeblood of chip manufacturers outside the bleeding edge. Legacy nodes largely power consumer electronics and automotive use cases, and the production of these older nodes and the silicon wafers that create them provide valuable profit streams for funding R&D departments across the chip industry.

China's new wave of legacy chip companies is powered by heavy government investment at the national and local levels. China's "Big Fund" for semiconductor production has raised ¥688 billion ($95 billion) over three rounds, with local governments investing in their regional champions.

Sunny Grimm
Contributing Writer

Sunny Grimm is a contributing writer for Tom's Hardware. He has been building and breaking computers since 2017, serving as the resident youngster at Tom's. From APUs to RGB, Sunny has a handle on all the latest tech news.

  • chaz_music
    It has been visible for quite some time that SiC wafers were going to go down in price as they become more and more commodity. Even in power electronics, the device designs are missing some key tech, so this is where tech development should be. And, of course, moving SiC into mainstream devices that can benefit from the higher thermal conductivity and switching speed of SiC such as CPUs, Flash, and communications (PCIe 6/7, PAM/QAM, etc.).
    Reply
  • thestryker
    This is an important part of the market that largely seems ignored by the big players because there's no money in it. It has also been ignored by all of the government policies/incentives across the globe. This was a partial driver behind Intel's attempt at buying Tower Semiconductor since they no longer have any legacy fabs. I'm not sure what the best way forward is with regards to protecting that industry, but hopefully it happens.
    Reply
  • Sketch 006
    Typical business practices, undercut until you dominate the industry or portion you want of it, then after the competition is killed off, start taking in the profit
    Reply
  • Grobe
    comercial question: Does the/some/any retailers have any ethics committee that can somehow mitigate the issue if the origin place (with defined borders as seen on a map or globe) have spoken open about ... (you know, when at least one neighbor of that particular place/area have reason to not feel safe) ?
    Reply
  • Konomi
    Well you know how the saying goes.. teach a man to fish.. or in this case, China. A predictable outcome.
    Reply
  • Sippincider
    thestryker said:
    This is an important part of the market that largely seems ignored by the big players because there's no money in it.
    Indeed. Have we really forgotten the Covid chip shortages already?

    Mature-node chips for automotive and transportation are one of those things that nobody loves until you can't get them. Then you discover just how critical they are...
    Reply
  • phead128
    US sanctions China at high-end nodes, then gets angry when China specializes at legacy nodes.

    US gets angry at chips shortages in world, then gets angry at chips "overcapacity" in world.

    At this point, just admit that you don't have a measurable or coherent strategy. You simply don't.
    Reply
  • t3t4
    Chinese legacy chipmakers and silicon producers are hitting the global market hard, and Western competitors are struggling to keep up with the intense supply and low prices

    Well,,,, duh!
    Now raise your hand if you didn't see it coming.
    Reply
  • Gururu
    This is a nothing burger. China is the largest producer of plastic in the world but noone cares about that. If they happen to make most of the chips for AI refrigerators too, BIG DEAL. Replace "mature chips" with "most advanced chips" they fall to <1%. They will be funneling nVidia chips through the backdoor for decades. IMO.
    Reply