China’s Dominance in Mature Process Capacity to Reach 29% in 2023, Surging to 33% by 2027

According to a report from TrendForce, the global ratio of mature (>28 nm) to advanced processes is set to undergo significant changes between 2023 and 2027. The expansion in this sector primarily targets specialty processes such as Driver ICs, CIS/ISPs, and Power Discretes, with Taiwanese manufacturers taking the lead.

In the realm of Driver ICs, the focus is on high voltage (HV) specialty processes. UMC currently dominates this space, followed by GlobalFoundries. However, SMIC’s 28HV and Nexchip’s 40HV are gearing up for mass production in the near future, narrowing their technological gap with other foundries. Competitors like PSMC, Vanguard, and DBHitek, who have similar process capabilities but lack twelve-inch factories, may face challenges in the short term. This trend could also have long-term implications for UMC and GlobalFoundries.

Moving on to CIS/ISPs, the mainstream processes revolve around the logic layer ISP and CIS pixel layer structure. The logic layer ISP has reached around the 45/40 nm range and is progressing towards more advanced nodes. Meanwhile, the CIS pixel layer, along with FSI/BSI CIS, predominantly utilizes processes at 65/55 nm and above. TSMC, UMC, and Samsung are currently leading the pack in this technology, but Chinese players like SMIC and Nexchip are catching up quickly. Their progress is fueled by Chinese smartphone giants OPPO, Vivo, and Xiaomi. Moreover, governmental policies promoting local production are positioning Chinese CIS companies like OmniVision, Galaxycore, and SmartSens to thrive in this sector.

Power Discretes, which include products like MOSFETs and IGBTs, have seen the involvement of companies like Vanguard and HHGrace for a considerable period. These companies boast a more comprehensive process platform and vehicle certification compared to many competitors. However, a wave of Chinese contenders, supported by national policies favoring electric vehicles and solar initiatives, are ready to enter the market. This includes mainstream foundries like HHGrace, SMIC, Nexchip, and CanSemi, as well as smaller Chinese IDMs and foundries like GTA and CRMicro. If China significantly ramps up its production capacity, it could intensify global competition in the Power Discrete manufacturing sector. This could lead to price wars among local Chinese businesses and potentially impact the order books and clientele of Taiwanese companies.

In summary, as China actively encourages both global and domestic IC designers to strengthen its local manufacturing presence, there is a possibility of flooding the global market with mature processes, which could ignite a price war. TrendForce predicts that as China’s mature process capacities continue to grow, the localization trends for Driver IC, CIS/ISP, and Power Discretes will become more prominent. Second and third-tier foundries with similar process platforms and capacities may face risks of losing clients and experiencing pricing pressures. Taiwanese industry leaders like UMC, PSMC, and Vanguard, known for their specialty processes, will find themselves at the center of this battle. The key to success will lie in technological prowess and efficient production yields.

Background Information

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About Samsung: Samsung, a renowned South Korean multinational conglomerate, has established itself as a global leader in various industries, including electronics, technology, and more. Founded in 1938, Samsung's influence spans from smartphones and consumer electronics to semiconductors and home appliances. With a commitment to innovation, Samsung has contributed groundbreaking products like the Galaxy series of smartphones, QLED TVs, and SSDs that have revolutionized the way we live and work.

  

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About TSMC: TSMC, or Taiwan Semiconductor Manufacturing Company, is a semiconductor foundry based in Taiwan. Established in 1987, TSMC is a prominent player in the global semiconductor industry, specializing in the manufacturing of semiconductor wafers for a wide range of clients, including technology companies and chip designers. The company is known for its cutting-edge semiconductor fabrication processes and plays a critical role in advancing semiconductor technology worldwide.