TSMC’s AI Dominance Is Creating New Opportunities for China’s Foundries - Dr. Robert Castellano's Semiconductor Deep Dive Newsletter

As artificial intelligence continues to evolve, the global semiconductor industry is undergoing significant transformation. While Taiwan Semiconductor Manufacturing Company (TSMC) dominates advanced-n... Read original →

TSMC’s strategic pivot toward 3nm/2nm and CoWoS is triggering a structural shortage in mature nodes. This shift forces NVIDIA and Broadcom to outsource power management ICs and HBM companion chips to SMIC and Hua Hong. Technologically, surging demand for 90–130nm BCD and high-voltage processes in edge AI and automotive applications strengthens Chinese foundries’ specialty-node moats. Geopolitically, U.S. EUV export controls—while capping China’s advanced-node progress—ironically reinforce its self-reliant DUV-based mature-node supply chain. With TSMC’s Nanjing fab expansion constrained and Samsung unable to fill the gap, SMIC is positioned to lock in long-term industrial and automotive contracts. Over the next 18 months, the industry will bifurcate: cutting-edge AI compute centralized in Taiwan, China, while foundational chip manufacturing regionalizes under Chinese foundry leadership.