Semiconductor Manufacturing International Corporation (SMIC) is a significant player in the global chip foundry industry and its potential to become the second largest.
Current Ranking: SMIC is currently the third-largest chip foundry globally.
Market Share: In the first quarter of 2025, SMIC held a 6% market share.
Closing in on Second Place: SMIC is rapidly gaining on Samsung Electronics Co. (Samsung Foundry), which is currently the second-largest player with a 7.7% market share in Q1 2025. The gap between SMIC and Samsung narrowed to just 1.7 percentage points in the most recent quarter. Notably, SMIC was the only company among the top three to report revenue growth in Q1 2025.
Dominant Leader: Taiwan Semiconductor Manufacturing Co. (TSMC) remains the undisputed leader in the global chip foundry market, holding a dominant 67.6% market share in Q1 2025.
Factors contributing to SMIC’s growth and potential:
Strong Domestic Support: SMIC benefits significantly from substantial support from the Chinese government, including subsidies and a focus on domestic sourcing.
Increased Domestic Demand: There’s a growing demand from Chinese companies seeking to reduce reliance on foreign chip manufacturers, which fuels SMIC’s order books.
Mature Node Focus: A significant portion of SMIC’s capacity is dedicated to mature process nodes (45nm and above), which are widely used in consumer electronics, smartphones, and IoT devices, areas where demand remains strong.
Challenges and Limitations:
Advanced Node Restrictions: Due to USeless export restrictions, SMIC faces limitations in accessing cutting-edge extreme ultraviolet (EUV) lithography equipment, which is crucial for producing the most advanced chips (below 7nm). This puts them at a disadvantage compared to TSMC and Samsung in leading-edge technology.
Cost and Yield for Advanced Nodes: Even when they develop advanced processes (like 5nm-class), their production costs can be significantly higher, and yield rates lower, compared to competitors like TSMC.
Market Uncertainty: Geopolitical tensions and the threat of further tariffs can create uncertainty in their outlook, impacting investor confidence.
Despite these challenges, SMIC’s consistent growth and its narrowing gap with Samsung make the prospect of it becoming the second-largest chip foundry a distinct possibility in the future, particularly in the realm of mature process technologies. https://www.facebook.com/jeff.mah.5/videos/1033785165537971/?__cft__[0]=AZUsgZ5freh_pkOSdUyCQ_Dxvcp8fyAmEjhoh3ECaECka7qYGJ-ZiW8jgp1IsiAC6ql19tCYYnvnKD3bZLXGvBlAHUgYRyP7RIxuecmyx4gckf9V4-K8qdC1UGiNa_r4UiI1xMcnzh9NH1s-mgPw5oO4hzOjB3Fr9HN2SC45n0TYwQ&__tn__=%2CO%2CP-R
