American chip company GF invested $10 billion in Chinese mainland to build a wafer factory in the early years, originally planned to produce 7 nanometers, but later due to US restrictions and GF's own business difficulties and failed, a few days ago the project came out of the receiver, a Chinese chip company will take over the project.
GF was ambitious at the time, hoping to take advantage of China's labor cost advantages, as well as the broad prospects of China's chip industry and China's vast market, to once again improve its technical strength and market share.
The importance of the Chinese market is undoubted, among the world's top five chip foundry companies, Samsung has a memory chip factory in China, TSMC and UMC also have chip factories in China, which can be seen the importance of the Chinese market.
It is reported that GF planned two phases of the factory at that time, the first phase of the production of mature technology, and the second phase of the project to put into production of 7nm process, which is also the most advanced process of GF, but with the change of the United States' attitude towards China's chip industry, as well as GF's own business problems, GF abandoned the project, which also led to GF is still stuck in the 14nm process.
Due to the unfinished Chengdu project, GF's revenue is now similar to UMC's, and even UMC is expected to surpass GF to become the world's third largest chip foundry, mainly because UMC has a Lianxin foundry in Xiamen, which has become profitable with the rapid growth of China's chip industry and has become an important factory for UMC.
At present, the news that Shanghai Huahong has accepted the Chengdu project, Shanghai Huahong is the second largest chip foundry in China, with the help of the huge domestic market, Shanghai Huahong has firmly established the position of the world's sixth largest chip foundry, in order to further expand production capacity, Shanghai Huahong then took a fancy to the Chengdu project.
Shanghai Huahong's choice of Chengdu project has many benefits for it, after all, it takes too much time and investment to rebuild a chip factory, and the Chengdu project has a certain foundation, and due to the unfinished, Shanghai Huahong will not need too much investment, which can help Shanghai Huahong expand rapidly.
Shanghai Huahong has such strength, matching the expansion of China's chip industry, in 2022, China's chip industry will develop rapidly, Shanghai Huahong's performance will grow significantly, and its profit will increase by more than 50%.At present, there is a strong demand for chip production capacity in China, and Shanghai Huahong's acceptance of the Chengdu project can take the opportunity to seize the development opportunity of the domestic chip industry.
In contrast, due to the setback in the Chinese market, GF has continued to report layoffs since last year, after all, the U.S. chip industry it relies on is now oversupplied, and the U.S. chip industry is still reducing costs on a large scale.
Such a comparison can show the importance of the Chinese market to the global chip industry, GF lost the Chinese market in an embarrassment, and relying on the domestic market SMIC, Shanghai Huahong, TSMC, UMC, etc. with factories in Chinese mainland have performed well, perhaps GF has regretted the loss of the Chinese market to the bottom of the bowels.