China's semiconductor manufacturing sector is witnessing a new wave of major investments. Leading foundries, Nexchip Integration and Huahong, have announced massive expansion plans totaling over 43.7 billion USD, accelerating their specialty process capacity build-out to support the domestic substitution drive.
Nexchip Integration, the world's third-largest pure-play foundry, has officially launched its Phase 4 fab project in Hefei with a total investment of RMB 35.5 billion (approx. $4.95B). This new 12-inch wafer fab will focus on 40nm and 28nm advanced specialty nodes, targeting applications like CIS, OLED display drivers, and logic. It is projected to add 55,000 wafers per month in capacity, with pilot production starting in Q4 2026 and full capacity by Q2 2028. Nexchip, already a global leader in display driver IC foundry, operates three 12-inch lines in Hefei with a combined monthly capacity exceeding 150,000 wafers. The Phase 4 expansion will solidify its dominance in display drivers while catering to growing demand from AI smartphones and smart vehicles.
Concurrently, Huahong Semiconductor has proposed an RMB 8.268 billion (approx. $1.15B) acquisition of a 97.4988% stake in Shanghai Huali Microelectronics Corporation (HLMC). HLMC operates Mainland China's first fully automated 12-inch foundry line, specializing in 65/55nm and 40nm processes. It reported 2024 revenue of RMB 4.988 billion and a net profit of RMB 530 million. Post-acquisition, this integration will resolve and add 38,000 wafers per month in mature-node capacity, creating significant scale effects and enhancing Huahong's competitiveness in the specialty process market.
These moves come as demand for specialty and mature process technologies surges, driven by booming sectors like AI and smart automobiles. The capacity expansion by Nexchip and the industry consolidation by Huahong not only align with market trends but also strengthen the autonomy and resilience of China's domestic semiconductor manufacturing supply chain.
ICgoodFind Perspective: The rapid capacity expansion by domestic foundries provides stronger support for the industry chain. We are committed to helping stakeholders connect with high-quality capacity resources and seize opportunities in the domestic substitution era.
