China to Capture Nearly One‑Third of Global Chip Production by 2030

[AleksandarK]

China is on course to become the world's leading semiconductor manufacturing hub by the end of the decade. Market research firm Yole Group predicts that by 2030, China will account for 30% of global foundry capacity, a sharp increase from its 21% share in 2024. This growth will position China ahead of Taiwan, which currently holds a 23% market share. In recent years, Beijing has committed vast public and private resources to domestic chip production. Last year, Chinese fabs processed 8.85 million wafers per month, marking an annual increase of approximately 15%. That output will rise to 10.1 million wafers per month in 2025. Much of this expansion comes from the commissioning of 18 new fabs. For example, Huahong Semiconductor opened its 12‑inch facility in Wuxi and began volume production in the first quarter of 2025.

Despite strong capacity growth, China still faces significant issues. The United States is the world's largest wafer consumer, with 57% of global demand, yet it produces only about 10% of the total supply. As a result, American firms must import most of their chips from Asian foundries. Japan and Europe enjoy a more balanced situation by relying on domestic production to meet local needs. China's manufacturers also confront technological barriers. Export controls imposed by the United States limit their access to the most advanced lithography equipment and EDA software. To address this gap, Beijing has launched substantial initiatives to develop homegrown tools and software solutions. These efforts are crucial to closing the divide at cutting‑edge process nodes even as output volumes continue to grow. For now, China is emerging as the leader in mature node output, an area that the automotive sector is particularly interested in.



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[Daven]

I guess I just wish it were companies competing to capture chip production and not governments of countries. I'm not really a libertarian but sometimes these things can end badly when countries get too involved in a particular industry. But I don't have strong feelings either way as long as we don't go to war over chips. I don't need higher fps in my games that badly.

This is probably good news for Taiwan as it could mean that China will leave them alone for the foreseeable future but that might be wishful thinking.

 

[TechLurker]

This is probably good news for Taiwan as it could mean that China will leave them alone for the foreseeable future but that might be wishful thinking.

I doubt it only because there are many good (for China) reasons to attempt a hostile takeover.

China might still want to steal TSMC and its staff for their own uses and also to hold bleeding edge chip manufacturing hostage (until TSMC Japan and Samsung can fully rival the output and node edge of TSMC Taiwan). Or even assuming China has the bleeding edge, might want to still cut off TSMC from the rest of the world, again, to steal the lead and hold high-end chip manufacturing hostage, and failing that, destroy TSMC to set them back years and interrupt chip production lines that are reliant on TSMC's top-end (esp. Apple, which China hasn't been happy with them shifting their business to India and other parts of the world).

At the same time, TSMC is relying on that bleeding edge to hope for some protection, but at the same time, they need to start expanding production of bleeding edge fabs elsewhere. IIRC, TSMC Japan and TSMC Arizona might start hosting fabs capable of the same bleeding edge, just with a far lower output. Worst case, I could see TSMC expanding further into Japan rather than the US, if only because Japan provides something like 90% of the special chemicals needed for fab production in the first place, and being a relatively neutral-friendly country, would allow for an easier supply line.

 

[GodisanAtheist]

It's a shame the US is perpetually struggling under such bad management, frankly the only way for the first largest "free market" economy in the world to compete with the second largest "corporatist" economy in the world is to put government muscle and tax dollars behind growing domestic semi-conductor manufacturing.

No individual company is going to be able to compete with a Chinese state owned enterprise free solo, and the US has demonstrated that we really don't have any cards to reign in China at this point.

 

[Daven]

Worst case, I could see TSMC expanding further into Japan rather than the US, if only because Japan provides something like 90% of the special chemicals needed for fab production in the first place, and being a relatively neutral-friendly country, would allow for an easier supply line.

This is an interesting point. So much goes into running a fab that just taking possession of one doesn't mean you can keep it running. Case in point, the heart of a fab comes from the Netherlands (ASML). Also what you just mentioned regarding chemicals from Japan. It really takes all countries working together to make these advanced fabrication plants work. Fighting over control is a zero sum game in this way.

It's a shame the US is perpetually struggling under such bad management, frankly the only way for the first largest "free market" economy in the world to compete with the second largest "corporatist" economy in the world is to put government muscle and tax dollars behind growing domestic semi-conductor manufacturing.

No individual company is going to be able to compete with a Chinese state owned enterprise free solo, and the US has demonstrated that we really don't have any cards to reign in China at this point.

Don't forget the tax dollars don't just come out of thin air. They come from US citizens like myself and the very businesses that need the government muscle. I have almost no representation in government so my taxes barely change but corporations are constantly lobbying for lower and lower and lower and lower tax rates. These US corporations are just reaping what they sow.

 

[phanbuey]

I guess I just wish it were companies competing to capture chip production and not governments of countries. I'm not really a libertarian but sometimes these things can end badly when countries get too involved in a particular industry. But I don't have strong feelings either way as long as we don't go to war over chips. I don't need higher fps in my games that badly.

This is probably good news for Taiwan as it could mean that China will leave them alone for the foreseeable future but that might be wishful thinking.

I am with you here. I think alot of people in the China seem to be as well -- seems like the whole nationalism / cultural revolution pivot since 08 is not loved by all.

Would be really nice if our governing mafias could get along with their governing mafias, and that the collective mafias would avoid stoking nationalism in the name of galvanizing support, but that might be way too much to hope for.

It's a shame the US is perpetually struggling under such bad management, frankly the only way for the first largest "free market" economy in the world to compete with the second largest "corporatist" economy in the world is to put government muscle and tax dollars behind growing domestic semi-conductor manufacturing.

Not to mention if they do, then they will just get copied and undercut.

 

[TechLurker]

This is an interesting point. So much goes into running a fab that just taking possession of one doesn't mean you can keep it running. Case in point, the heart of a fab comes from the Netherlands (ASML). Also what you just mentioned regarding chemicals from Japan. It really takes all countries working together to make these advanced fabrication plants work. Fighting over control is a zero sum game in this way.

That's why it's a little concerning that China has been proactively reverse-engineering second-hand ASML units they've gotten legally or illegally, as eventually China won't need ASML either, and in fact could attempt to undercut the market by flooding cheaper "equivalent" systems. China is literally aiming to own the entire line from start to finish, so as to be capable of avoiding sanctions and trade bans.

As for the US, they only really have DuPont, who also produces key chemicals used in chip-making, but their output compared to Japan is so much lower, and also relatively costlier given the lack of scale.

 

[GodisanAtheist]

As soon as China has a "Good enough" chip manufacturing doctrine up and running Taiwan and the rest of the world are gonna have a real bad time.

 

[Rightness_1]

Well, China said it will take Taiwan no later than 2027, so I guess they will "capture" much more than "one third" of the global chip supply before then...

 

[Caring1]

"Capture" is such an usual choice of words, considering their intent towards Taiwan.