China’s 8-Inch Foundry Utilization Soars to Full Capacity, Sparking Price Hikes and Strategic Expansion

China’s 8-Inch Foundry Utilization Hits Full Capacity Amid Domestic Demand Surge

China’s semiconductor industry is witnessing a dramatic increase in 8-inch foundry utilization, with leading players such as SMIC and HuaHong Group operating at or near full capacity as of October 08, 2025. This surge is fueled by robust local demand for power management ICs (PMIC) and analog integrated circuits, both critical for an array of electronics and industrial devices. The full utilization rate is prompting these foundries to raise prices and accelerate expansion plans, marking a pivotal moment for the region’s chip supply chain.

Domestic Demand and Strategic Partnerships Propel Expansion

China’s localization push and government-backed incentives have sharply increased demand for mature-node semiconductors. As a result, SMIC’s utilization rate climbed to 92.5% in the second quarter of 2025, signaling record-high activity levels. HuaHong Group is similarly experiencing intense demand, particularly for advanced node capacity such as 28/22nm ISPs, which are essential for high-end CMOS image sensor (CIS) upgrades. This competition for capacity is driving clients to establish close partnerships with foundries to secure production slots in an increasingly constrained environment.

Price Adjustments and Expansion Plans in the 8-Inch Wafer Market

With utilization rates at historic highs, Chinese foundries are initiating price hikes for 8-inch wafer fabrication. Although global price increases have generally stabilized in 2025, localized price adjustments in China reflect the intense competition for available capacity. In response, foundries are expanding production lines and considering new facilities to alleviate bottlenecks and meet ongoing demand. This expansion is expected to reshape the supply landscape for mature-node chips over the coming quarters.

Geopolitical Pressures Reshape Global Semiconductor Supply Chains

The surge in China’s 8-inch foundry utilization comes amid persistent US-China trade tensions and tightening export controls. As a result, US clients have begun shifting orders to South Korean foundries, seeking to insulate themselves from geopolitical risks. Korean fabs such as DB HiTek and SK Key Foundry have reported utilization rates exceeding 80%, largely driven by redirected Chinese orders.

Industry experts caution, however, that this supply chain realignment may introduce new risks, including potential overcapacity and intensified price competition if demand moderates in the future.

Public and Industry Reaction

Within China, industry insiders are voicing concerns over potential price hikes and supply constraints, as full utilization tightens availability for both domestic and international customers. Global clients, meanwhile, are re-evaluating sourcing strategies, weighing the benefits of local partnerships against the backdrop of shifting geopolitical landscapes and evolving tariff risks.

“We’re seeing a paradigm shift in how global semiconductor supply chains are structured, with China’s 8-inch foundry utilization acting as a key catalyst for both opportunity and disruption.”

Outlook: Capacity, Competition, and the Future of 8-Inch Foundries

As demand for mature-node chips remains robust in China, foundries are expected to maintain high utilization rates in the near term. However, analysts warn of possible overcapacity and downward price pressure if global demand softens or if new production lines come online too quickly. The coming months will test the resilience of both Chinese and international semiconductor ecosystems as they adapt to new demand patterns, price dynamics, and a rapidly evolving geopolitical environment.