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China to cut advanced chip supply deficit as 7nm output grows
Goldman Sachs forecasts China’s 7nm-and-below wafer supply will rise to 410,000 wafers per month by 2035, helped by new foundry capacity and improving yields.
China is expected to materially reduce its advanced-chip supply deficit over the next decade as domestic foundries expand output, according to a Goldman Sachs report cited by SCMP Economy.
Goldman projects the supply of wafers made using 7-nanometre and below advanced processes will grow at a 46.0 per cent compound annual rate between 2025 and 2035, outpacing domestic demand growth of 17.0 per cent. The gap between supply and demand is forecast to narrow to 34.0 per cent by 2035 from 92.0 per cent in 2025.
The report projects advanced-node wafer supply reaching 410,000 wafers per month by 2035, versus demand of 619,000 wafers. It also assumes SMIC will add monthly capacity of between 30,000 and 50,000 advanced-node wafers each year from 2026 to 2031, then add another 20,000 wafers per month annually through 2035.
Even so, the bank highlights lithography as a weak link that could limit China’s ability to achieve full semiconductor independence. Goldman’s model assumes yields improve from 23.0 per cent in 2026 to 50.0 per cent in 2030 and 75.0 per cent by 2035, compared with Taiwan Semiconductor Manufacturing Company’s 7nm yields that can exceed 90.0 per cent.