With the increasing global concern about climate change and environmental protection, the new energy vehicle market has developed rapidly. As the core component of new energy vehicles, the demand for chips has also increased. In this context, SMIC has seized this opportunity to continuously expand the production capacity of chips with mature processes. Unlike other chip giants, SMIC focuses on mature processes, because for new energy vehicles, the demand for mature process chips is more urgent. The move has received a positive response from the market, and China has become the world's largest producer and seller of new energy vehicles. At the same time, China's dependence on imported chips is also decreasing, while the demand for domestic chips continues to increase, which makes more and more chip foundry orders handed over to SMIC. About 75% of SMIC's current orders come from domestic manufacturers. Wei Zhejia and other TSMC executives also personally visited important domestic customers, hoping to win more chip orders.
In addition, SMIC has also invested more than 150 billion yuan to expand its factory to further expand its chip production capacity. According to the news released by SMIC, the wafer expansion plan has been basically completed, and the goal of monthly output of various chips will exceed 100 million by the end of the year. In contrast, some other chip giants such as TSMC have been relatively slow to expand their production capacity, and the US factory has even decided to delay production by a year. Companies such as ASML have also stepped up shipments to the Chinese market, with the domestic market becoming ASML's largest market in the third quarter, contributing more than 46% of revenue. All these show that domestic manufacturers such as SMIC have obvious advantages in continuing to expand chip production capacity.
After the revision of the chip rules, SMIC accelerated the localization process of the chip production line. After the launch of Huawei Mate60Pro, the United States once again restricted the shipment of chips and semiconductor products, and also asked ASML to limit the shipment scope of mainstream lithography machines. However, domestic manufacturers such as SMIC and Huawei have been accelerating the process of chip localization and have conducted a comprehensive verification this year. According to the news, SMIC and the domestic industrial chain have jointly achieved an important breakthrough, and China has the ability to build a DUV lithography machine, which can reduce the chip manufacturing process to 7nm, and soon realize the mass production of the whole process of non-US 7nm. It is worth noting that SMIC has completed the R&D task of the 7nm process as early as three years ago, and independently developed N1, N2 and other processes, similar to TSMC's 7nm process, and has achieved mass production. In addition, SMIC also said that it has started research and development work on the 5nm process, and will fully launch the corresponding work after the arrival of ASML's EUV lithography machine. At present, ASML can still ship subsequent models of lithography machines such as the 2000i to China, which will further reduce the chip manufacturing process to 5nm, which is an important breakthrough for SMIC.
The voice of the new ASML CEO has aroused foreign media's appreciation for SMIC. SMIC has identified the development opportunities of China's new energy vehicle market by selecting mature processes to expand chip production capacity, seized the market demand, and gained huge development space. Moreover, by accelerating the localization of chip production lines, SMIC has further strengthened its competitiveness and become one of the leaders in the chip industry. SMIC's successful experience also provides lessons and inspiration for other chip giants to adapt to changing market needs and maintain a competitive edge. It is believed that with the continuous efforts and innovation of SMIC and other domestic manufacturers, China's chip industry will occupy a more important position in the international market and make greater contributions to the development of China's science and technology.