china's chip sector rebounds amid global supply chain worries

2025-06-12 tsmc

shanghai, Thursday, 12 June 2025.
chinese domestic chip stocks are signaling a recovery. this is shown by the performance of the SSE STAR Market Chip Index. semiconductor stocks on the Shanghai and Shenzhen exchanges are also up. this occurs with global worries about semiconductor supply chains. potential shortages are expected in 2025. the index performance suggests confidence in domestic chip production. it also suggests a buffer against global market volatility. this could impact tsmc’s competitive position.

tsmc’s market position

The recovery of China’s domestic chip sector poses a challenge to Taiwan Semiconductor Manufacturing Co. (TSMC). Increased domestic production could reduce reliance on foreign suppliers like TSMC [1][2][3]. This shift could affect TSMC’s market share in China. Geopolitical factors further complicate the situation, adding uncertainty to TSMC’s operations and stock performance [GPT].

manufacturing capacity and expansion

As Chinese chip companies expand, TSMC’s manufacturing capacity and future expansion plans are under scrutiny. The ability of domestic firms to meet local demand could slow TSMC’s growth in the Chinese market. However, Ren Zhengfei of Huawei suggests focusing on mid to low-end chips, where China has more opportunities [6]. This strategy could mitigate some competitive pressure on TSMC in advanced node manufacturing [6].

geopolitical risks and tsmc

Geopolitical tensions between the U.S. and China continue to cast a shadow over the semiconductor industry. These tensions could disrupt supply chains and affect TSMC’s ability to serve Chinese customers. The U.S. government’s efforts to curb China’s technological advancement add another layer of complexity [GPT]. Despite these challenges, some foreign media suggest that Washington has not successfully contained China’s progress in areas like artificial intelligence [6].

investment in education

Increased investment in education signals a long-term commitment to strengthening China’s semiconductor industry. For example,虞仁荣, China’s ‘chip rich man,’ is investing 30 billion yuan to establish Ningbo Oriental Institute of Technology [4]. This focus on nurturing talent and fostering innovation could eventually lessen reliance on foreign chip technology and impact companies like TSMC [4]. This investment aims to create a leading science and engineering university [4].

Bronnen

china chips semiconductor stocks