[News] SMIC Likely to Continue Expanding Capacity Amid U.S.-China Tech Tensions

Chinese semiconductor foundries continue to expand production capacity under the pressures of the ongoing U.S.-China technology conflict, aiming to meet domestic demand. According to a recent TechNews report, a plot of land adjacent to Semiconductor Manufacturing Beijing Corporation has been listed for land-use rights transfer, with market speculation suggesting that this move is part of SMIC’s preparations for future capacity expansion.

Semiconductor Manufacturing Beijing Corporation is backed by SMIC and China’s National Integrated Circuit Industry Investment Fund Phase II, focusing on the production of 12-inch semiconductor wafers and IC packaging solutions.

According to Beijing Municipal Commission of Planning and Natural Resources, the plot near Semiconductor Manufacturing Beijing Corporation recently had its land-use rights listed for transfer. However, details regarding the transferee have not yet been disclosed.

Industry sources anticipate that this land transfer signals SMIC’s continued capacity expansion. The same TechNews report highlights that recent indicators suggest Chinese foundries’ capital expenditures have exceeded market expectations. This trend is driven by the surge in demand for AI inference models fueled by DeepSeek, as well as the shift in orders to Chinese foundries following TSMC’s supply restrictions to China, potentially leading to further expansion in the sector.

According to TrendForce, as China’s new production capacity comes online, Chinese foundries’ share of global mature process capacity among the top ten players is expected to surpass 25% by the end of 2025, with 28/22nm processes seeing the largest capacity additions. Additionally, China’s specialty process development is advancing fastest in high-voltage (HV) platform technologies, with 28nm HV entering mass production in 2024.

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(Photo credit: SMIC)