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AI Buildout Supercharges China’s Chip Industry at Semicon China

SEMI China projects the country will control about 42% of mainstream wafer capacity by 2028.

Visitors look at a display of semiconductor devices at the SuperSiC booth during SEMICON China, a trade fair for semiconductor technology, in Shanghai, China, March 25, 2026. REUTERS/Go Nakamura
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The Shenzhen plan supports the “deep integration” of the open-source RISC-V architecture. Photo: Handout

Overview

  • Industry executives at Semicon China in Shanghai said the race to build AI data centers is driving faster-than-expected orders and new spending across China’s chip sector.
  • SEMI China projected the country’s share of 22–40nm wafer output will reach about 42% by 2028, up from 37% in 2026.
  • AI workloads now demand tougher chip testing and more advanced packaging, with optical interconnects that use light to move data between chips emerging as a key bottleneck to solve.
  • Suppliers reported full pipelines, with Mycronic’s MRSI unit booked into next year and Suzhou Origins set to start building a new materials plant next month to serve major Chinese chipmakers.
  • The surge is already straining supplies of raw materials and high-end components, and experts said foreign firms remain crucial in those specialized tiers and for after-sales support.