“Many people believe that competition in the semiconductor industry comes down to the advanced nodes and that we will only achieve success when we reach 2 or 3 nm. This is a misunderstanding“. This statement was made by Richard Chang Rujing, the founder of SMIC (Semiconductor Manufacturing International Corp), the largest Chinese semiconductor manufacturer with a global market share of about 5%.
Rujing has spoken these words with a very clear intention: he wants China to strengthen its supply chain and its position in the global integrated circuit market by developing its manufacturing capacity for mature chips. Currently the most advanced integration technology that SMIC has in production is 7nm photolithography due to their inability to access equipment extreme ultraviolet lithography (VVE) of ASML. And there is no doubt that it and other Chinese chip manufacturers would benefit greatly from having the capacity to produce 5, 3 and 2 nm semiconductors.
In this way they could compete on equal terms with TSMC, Intel and Samsung. However, there is something very important that we should not overlook: advanced nodes represent less than 20% of the world market of integrated circuits by product volume, while more than 80% of demand It comes from the segments of mature nodes and specialized processes. Rujing wants SMIC and the other Chinese chipmakers to invest more in their mature nodes, and it makes sense. After all, this is the strategy that is allowing China resist US pressure.
Mature chips are the medicine the Chinese industry needs
During the first two months of 2026, China exported integrated circuits worth $43.3 billionwhich represents an increase of 72.6% compared to the same period in 2025. This information comes directly from Chinese customs records, so it is presumably reliable. However, the most astonishing thing is that this country’s exports as a whole have grown by 21.8% during January and February, so it is evident that the semiconductor industry has been stimulated with much more intensity than other sectors.
More than 80% of demand comes from the mature nodes and specialized processes segments
Domestic demand has stimulated the growth of the Chinese chip industry in recent years, but the figures I have collected in the previous paragraph show that external demand is also very strong. In this context it is reasonable for us to ask what type are integrated circuits that Chinese manufacturers are mass producing.
And the answer is very revealing: these are chips derived from mature integration technologiesusually 28 nm or less advanced. After all, the semiconductors that we mostly find in electronic devices, household appliances or cars, among other products, have been produced using them.
Many Chinese chip manufacturers, such as Hua Hong Semiconductor, China Resources Microelectronics or Guangzhou ZenSemi, are manufacturing 28 nm integrated circuits or with even more mature technologies. And the Beijing Yandong Microelectronics (YDME) company is going to build a 4.6 billion dollar plant expressly to produce 28nm semiconductors on 300mm wafers.
It is evident that these companies would not focus on the manufacturing of mature chips in this way if it were not a profitable strategy, and, above all, necessary to sustain the Chinese integrated circuit industry at a time as critical as the current one.
Image | TSMC
More information | SCMP
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