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

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

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******** 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

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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.

In 2025, however, it will become increasingly challenging to outbid a growing wave of ******** fabs pricing their wares far cheaper than Western companies can afford to compete. Due mainly to

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blocking ******** companies from access to modern process nodes and manufacturing equipment, China’s fast-growing semiconductor sector has pivoted to legacy chips to feed its needs for domestic tech. China’s fabs are expected to account for 28% of global mature chip capacity by the end of 2025.

“Just two years ago, a mainstream 6-inch SiC [silicon carbide] wafer from global leader Wolfspeed was $1,500,” an anonymous sales director for a ******* chipmaker shared with

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. Today, the same 6-inch wafer is sold for only $500 by Guangzhou Summit Crystal Semiconductor, where dozens of other little-known ******** fabs price their wafers at similarly impossible undercuts.

The sales director called China’s growth in the sector “a bloody knockout match.” He continues, “We expect many ******** players as well as foreign players will get hurt. Many of them already have, and eventually many will have to exit these bloody games.”

The aforementioned Wolfspeed, once the world leader in silicon wafer production, is now recovering from laying off

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in response to its stock value falling 96% in 3 years. Onsemi, an Arizona-based legacy semiconductor company, announced

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today. While not all of this downsizing can be blamed on ******** dominance, the U.S. government has publicly speculated that China’s rapid rise in legacy chip manufacturing

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.

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

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($95 billion) over three rounds, with local governments investing in their regional champions.

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The sector’s widespread growth across China creates dozens of new players with which Western companies must compete. However, this growth also risks serious oversupply. China’s 28% mature node market share is expected to grow to 39% by 2027.

“There is already oversupply in several types of mature chips, and China’s economy hasn’t fully bounced back yet,” says the IDC’s Galen Zeng. “We expect ******** players to ramp up more aggressively than their global peers over the next few years, driven by China’s localization push.”

The market flooding of legacy chips coming from China is beginning in full, as predicted when China first announced its ramp-up of mature node production in 2023. The full effect of this new theater of the

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on both countries and chipmakers, large and small, is yet to be seen. As profit margins disappear in the name of growing market share, the profit motive will not look kindly on either aggressor in this legacy chip melee.

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#Chinas #mature #chips #world #production #creating #oversupply #Western #companies #express #concern #survival

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