Foundry Power: China Will Make More Silicon, but Taiwan Will Still Rule the Market

By 2030, we expect China to become the world’s largest semiconductor manufacturing base by volume. Taiwan, however, will continue to reign supreme in revenues, margins, and technological sophistication as the industry splits into two regimes: volume versus value.

China, with a flood of state-backed investment, is racing to secure supply chain sovereignty by expanding 28nm and larger nodes essential to many product lines. Taiwan, meanwhile, is consolidating its position at the top of the value stack.

TSMC’s (TSM) grip on 3nm, 2nm, and eventually sub-2nm nodes ensures that Taiwan will continue to generate the most global foundry revenue—and profits. This divergence—of physical scale versus financial yield—is the defining structure of the modern semiconductor economy and reveals the strategic intent of the leading players.

China Makes Steel, Taiwan Cuts Diamonds

As Table 1 shows, the global semiconductor foundry landscape in 2025 is bifurcated by design and destiny. On one side sits the volume buildout—a mass of capacity in mature nodes like 65nm and 45nm, driven by auto integrated circuits (ICs), power management chips, and microcontrollers. On the other sits the value front, advanced logic nodes at 5nm and below where margins soar and complexity concentrates.

When measured in 8-inch equivalents, China has already taken the lead in physical volume at mature nodes, with 1,100 kwpm (kilowafers per month) of ≥65nm capacity—far outpacing Taiwan, Korea, or the United States. Taiwan, by contrast, leads in advanced-node throughput, with nearly 600 kwpm at ≤10nm alone.

The regional divergence is driven largely by geopolitics. China adds capacity at legacy nodes as a hedge against export control regimes and to support domestic substitution. Taiwan and Korea continue to follow the money. The United States remains modest in volume but increasingly strategic in node targeting, supported in part by the CHIPS Act.

Seven Years of Wafer Buildout

Table 2 tells a clearer story of who is building and why. China’s foundry capacity nearly doubled in six years, adding over 600,000 8-inch wafer equivalents per month. Taiwan, while still expanding, did so more slowly—yet added disproportionate value by targeting smaller geometries. Korea’s expansion has been methodical, centered on Samsung’s (KRX: 005930) ramp of GAA (gate all around transistors) at 3nm. Meanwhile, U.S. growth has been largely backloaded, with early CHIPS Act funding still maturing into production output.

China is not chasing bleeding-edge nodes—it is amassing the foundation of the analog, auto, industrial, and power markets. It is building the chip equivalent of steel and concrete, not jewelry.

Revenue and Reality: The Density Differential

As Table 3 shows, the revenue generated by elite vs. legacy nodes varies by orders of magnitude. A 3nm wafer at TSMC can command over $17,000. A 65nm display driver wafer might earn $700. This is why TSMC, despite producing fewer wafers than China, earns over 60% of global foundry revenue.

The control of high-margin nodes creates far more strategic leverage than the number of wafers alone.

Forward to 2030

Table 4, forecasting growth through 2030, shows China continuing to grow capacity faster than any other nation. If current growth rates hold, China will surpass Taiwan in total installed capacity sometime between 2027 and 2028. While Taiwan and Korea will expand advanced nodes, their total wafer output will rise more slowly. China’s wafer expansion is not a bubble—it is a rebalancing of the industrial base.

The Corporate Map: Foundry Share by Company

Table 5 shows capacity leadership at the company level still belongs to TSMC, though SMIC (HK: 981) is closing the gap in physical volume. Samsung remains a strong second player in advanced logic. Intel Foundry’s future is unclear as CEO Lip-Bu Tan appears to be abandoning plans to pursue external customers.

Node Strategy: Who Builds What

According to Table 6, the node-level breakdown by company reveals the actual battlefield. TSMC has more capacity at ≤10nm than the entire rest of the world combined. SMIC and Hua Hong (1347 HK) dominate at 65nm and 45nm.

SMIC, Hua Hong, and Nexchip (SHA: 688249) have built out a distributed architecture of trailing-edge logic nodes that support everything from set-top boxes to automotive MCUs. But it is TSMC and Samsung that still control the engines of AI, HPC, and advanced smartphone SoCs.

China is trying to dominate the supply of the chips that keep economies running. TSMC and Samsung are doubling down on the most valuable chips in the world.