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Chinese top chipmakers target major acquisitions
Hua Hong Semiconductor will acquire a 97.5% stake in Shanghai Huali Microelectronics for about US$1.2 billion.
The company will buy shares from its parent Hua Hong Group and several investment funds.
The deal will add monthly capacity of 38,000 chips using 65-nm and 40-nm processes.
The move follows SMIC’s plan to buy the remaining 49% of Semiconductor Manufacturing North China for US$5.8 billion.
Both deals signal a new wave of consolidation as China pushes for technological self-sufficiency.
SMIC expects full-year revenue to exceed US$9 billion, while China’s integrated circuit output rose 10.6% in the first 11 months of 2025.
🔗 Source: South China Morning Post
🧠 Food for thought
Implications, context, and why it matters.
China’s mature-node push depends on fixing low fab use
- Hua Hong’s purchase of Huali adds ~38,000 wafers per month (wpm) (silicon disks for chips) at 65/55nm and 40nm 1. In these nodes (older process technologies like 40–65nm), TrendForce forecasts factory utilization (the share of capacity used) will stay under 80% and slightly top 75% in 2025, while some fabs sat near 70% or lower in 2023–2024 23.
- Mordor Intelligence says SMIC cut 28nm quotes from $2,500 to $1,500 per wafer in the 2024 downcycle and sees China near 39% of global 28–65nm capacity by 2027, raising ASP erosion risk 4.
- The deal will create value only if Huali’s lines lift utilization rather than adding to overcapacity, a detail not disclosed in the announcement 12.
Design houses can use wider MPW access for mature-node chip verification
- Hua Hong already offers Multi-Project Wafer (MPW) shuttles (shared-wafer runs that let multiple customers prototype designs at lower cost) 5. Nodes include 95nm and 90nm 5. They also span 55nm and 40nm for logic with analog 5.
- China has over 1,000 chip design houses and 300-plus auto-chip startups since 2023 4. They feed fabless clients (companies that design chips but outsource production) that need low-cost prototyping for power management integrated circuits (ICs), microcontrollers, and IoT chipsets 4. Third-party IP vendors plus design service firms can group smaller customers onto Hua Hong MPW calendars and integrate PDKs (process design kits) for automotive, forecast at 15.7% CAGR (compound annual growth rate), and industrial uses 4.
