The New Mature‑Node Chip Crunch: How the AI Boom Is Pushing Orders to Chinese Foundries

When these sectors rebound simultaneously, they place heavy pressure on the mature‑node supply base.

Market research firm TrendForce projects that the average utilisation rate for 8‑inch fabs among the world’s top foundries could approach about 90% in 2026 and remain above 80% into 2027, reflecting sustained tightness in mature‑node capacity.

How the AI boom is shifting orders to Chinese foundries

As overseas foundries concentrate on advanced AI chips, many customers are looking for alternative suppliers for mature‑node production.

Chinese fabs have become a major destination for these orders. According to industry commentary from SMIC leadership, the surge in AI demand has directly tightened supply for mature‑process chips such as power‑management ICs, contributing to increased orders for Chinese foundries.

Several factors make this shift possible:

• Chinese foundries maintain large mature‑node manufacturing footprints.
• Some Western and Asian foundries are scaling down older fabs or reallocating them to higher‑margin processes.
• Supply‑chain localisation policies encourage domestic sourcing of chips within China.

This combination allows Chinese manufacturers to capture order spillover when global leaders focus on advanced nodes.

Rising utilisation and industry reshaping

The redistribution of orders is visible in utilisation and market dynamics.

SMIC’s utilisation rates have climbed sharply alongside stronger wafer shipments and mature‑node demand. By the end of 2025, utilisation was reported above 93%, reflecting strong demand for its fabrication capacity.

Across the wider foundry market, AI demand has also strengthened the dominance of advanced‑node leaders. For example, TSMC reached roughly 70% global foundry market share in Q2 2025, largely driven by advanced‑node chips and packaging used in AI systems.

This divergence highlights a growing structural split in the industry: advanced‑node leaders capture the AI boom, while mature‑node suppliers absorb the spillover demand.

Impact on SMIC revenue growth

Chinese foundries — especially SMIC — are benefiting from the mature‑node shift.

SMIC reported strong financial results as demand improved:

• $2.49 billion revenue in Q4 2025, up from $2.38 billion in Q3 2025 and $2.21 billion a year earlier.
• $9.33 billion total revenue in 2025, up from $8.03 billion in 2024.
• Net profit of $685.1 million in 2025, a 39% year‑over‑year increase.

Much of this growth reflects higher wafer shipments and stronger utilisation tied to mature‑node demand.

The broader industry takeaway

The emerging mature‑node shortage is largely the result of structural demand shifts rather than a universal chip shortage. AI infrastructure is pulling capacity toward advanced processes and HBM, while demand for mature‑node chips remains strong across everyday electronics.

As global foundries concentrate on the most profitable AI technologies, Chinese manufacturers with large mature‑node capacity are increasingly positioned to capture overflow demand. The result is a reshaping of the semiconductor supply chain — where AI accelerates both advanced‑node leadership and the strategic importance of mature‑node fabs.