SMIC leverages process flexibility to capture orders amid global foundry capacity squeeze - digitimes

SMIC demonstrated its strategic response to global market dynamics shifts during its Q1 2026 earnings Q&A session. Amid global foundry capacity constraints, SMIC leveraged its process flexibility to s... Read original →

SMIC’s pivot to flexible manufacturing in mature and specialty nodes—amid its exclusion from 3nm EUV—is a calculated countermeasure to U.S. tech containment. This not only alleviates global shortages in power ICs, CIS, and MCUs but also pressures equipment and EDA vendors to decouple from U.S.-centric ecosystems. However, any BIS expansion of the Foreign Direct Product Rule would sharply increase SMIC’s compliance overhead and supply chain fragility. TSMC and Samsung may respond with aggressive pricing or customer-lock-in tactics, especially in non-HPC niches. Over the next 18 months, China’s foundry sector will accelerate toward a self-reliant design-manufacturing stack, with SMIC’s ‘high-flexibility, non-leading-node’ model emerging as a blueprint for global fabs navigating fragmented demand.