Richard Chang, the founder of Semiconductor Manufacturing International Corporation (SMIC), China’s largest chipmaker, has pushed back against the prevailing industry narrative that defines semiconductor success solely by the ability to produce the most advanced nodes, such as 3nm or 2nm.
In a recent interview highlighted by WCCFTech, Chang argued that this hyper-focus on the bleeding edge is a fundamental misconception. He emphasized that while advanced nodes are crucial for specific applications like high-performance computing and smartphones, the vast majority of the global semiconductor market relies on mature and legacy nodes.
“Measuring the success of a semiconductor industry only by whether it can produce 3nm or 2nm chips is a misconception,” Chang stated. He pointed out that mature nodes, typically defined as 28nm and older, are essential for a wide array of critical industries, including automotive, industrial automation, consumer electronics, and the Internet of Things (IoT). In fact, Chang noted that advanced manufacturing processes account for less than 20% of the entire semiconductor market, with more than 80% of demand coming from mature processes.
Chang also pushed back against the tendency of Chinese startups to crowd into the same high-profile segments. “We don’t need to do everything. We need to prioritize. For example, we can achieve excellence in a specific niche and solve a bottleneck problem, which would be a huge contribution to the industry. Compared to the homogeneous competition of crowding into popular tracks, focusing on cultivating the missing links and niche markets in the domestic semiconductor industry is a more pragmatic and valuable way to break through,” he said.
The Strategic Value of Mature Nodes
Chang’s comments come at a time when China is aggressively expanding its capacity in mature node manufacturing. While US export controls have severely restricted China’s access to the extreme ultraviolet (EUV) lithography machines required for sub-7nm production, Beijing has pivoted to dominate the legacy chip market.
This strategy is already yielding results. Chinese chip giants SMIC and Hua Hong recently posted record revenues, driven largely by strong domestic demand for mature chips used in electric vehicles and smart appliances. Furthermore, China’s domestic chipmakers have seized 41% of the local AI market, demonstrating that even in AI, not every application requires the absolute latest silicon.
The automotive sector, in particular, is a massive consumer of mature chips. As vehicles become increasingly electrified and autonomous, the demand for microcontrollers, power management ICs, and sensors, all typically manufactured on mature nodes, is skyrocketing. China’s booming EV industry, led by companies like BYD and NIO, is creating an enormous and growing domestic market for exactly the kind of chips that SMIC specializes in producing.
The Talent Gap and the Road Ahead
Despite his defense of mature nodes, Chang acknowledges the significant challenges facing China’s semiconductor industry. He recently warned that China faces a 300,000-person semiconductor talent gap, a shortage that threatens to bottleneck both mature and advanced manufacturing efforts.
This talent shortage is compounded by the ongoing geopolitical pressure on Chinese chipmakers. Taiwan has tightened its crackdown on China’s semiconductor talent poaching, making it harder for Chinese firms to recruit experienced engineers from the island. Meanwhile, the US has been working to limit the flow of semiconductor expertise to China through visa restrictions and export controls on the transfer of technical knowledge.
The MATCH Act, introduced in the US Senate, aims to further restrict China’s access to the equipment needed to advance its chipmaking capabilities, even at mature nodes. If passed, it could significantly hamper SMIC’s ability to expand its production capacity.
Reframing the Narrative
Chang’s intervention is significant because it attempts to reframe the public narrative around China’s semiconductor industry. In Western media and policy circles, the story is often told as a binary: China is either winning or losing the chip race, measured by its ability to match TSMC’s most advanced processes.
Chang’s perspective offers a more nuanced view. By arguing that mature nodes are strategically vital, he is making the case that China’s semiconductor industry is not simply a pale imitation of TSMC but a distinct and valuable ecosystem serving different but equally important market needs.
Furthermore, while the inability to produce advanced chips remains a strategic vulnerability for China, particularly in the realm of frontier AI model training, where the delay of DeepSeek V4 fueled speculation over Huawei chip limits, Chang’s argument suggests that the overall health of China’s semiconductor industry should be judged on a broader set of criteria.
In the long run, the battle for 28nm may prove just as consequential for global industrial supremacy as the race for 2nm. A nation that controls the production of the chips that power cars, factories, and consumer devices holds enormous economic and strategic leverage, regardless of whether it can manufacture the most advanced processors for data centers.
Chang’s argument also has direct implications for how the US should calibrate its export control strategy. If the US focuses its restrictions too narrowly on the most advanced nodes, it may inadvertently cede the mature node market to China entirely, a market that, by volume, dwarfs the advanced segment. As China’s big tech such as ByteDance, shifts its chip orders toward Huawei and Cambricon, and China’s domestic AI ecosystem grows increasingly self-sufficient, the strategic value of mature node dominance becomes ever clearer. For policymakers in Washington, Chang’s perspective is a reminder that winning the chip war requires thinking beyond the headline numbers.