Legacy Chip Supplies Tighten as Production Shifts to AI
As Samsung pivots away from mature 8-inch nodes, Chinese foundries are raising fees to capitalize on shrinking global capacity.
Updated on Oct. 25, 2026 in Semiconductors
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Samsung is shifting wafer production capacity away from 8-inch mature-node chips to prioritize advanced logic and AI accelerator components. This withdrawal has prompted major Chinese foundries to increase fees and expand their own legacy chip production capacity.
Why it matters
The realignment of foundry capacity marks a significant transition in the semiconductor market as firms chase higher margins in AI, creating a supply vacuum for older components that Chinese foundries are moving to fill.
Chinese foundries are scaling, with SMIC adding 40,000 wafers of monthly capacity by the end of 2026 and HuaHong investing over RMB 10 billion in a new 12-inch specialty line. These moves follow Samsung's pivot away from 8-inch nodes.
The players
Samsung
South Korean electronics conglomerate shifting its foundry focus from legacy 8-inch chips toward high-margin AI accelerators.
SMIC
China's largest semiconductor foundry currently expanding capacity to fill market gaps left by departing international competitors.
HuaHong
Chinese foundry operator specializing in legacy nodes and investing over RMB 10 billion into new 12-inch specialty production lines.
Nexchip
Foundry firm increasing its process node fees following a CNY 35.5 billion expansion project launched in January 2026.
The details
Samsung is reallocating its internal fabrication resources to focus on advanced packaging and logic for AI, effectively abandoning mature, older-generation process nodes. In response, Chinese foundries including SMIC are installing new equipment in existing factory floor space to absorb the market demand. HuaHong is similarly expanding its specialty-process capabilities, with utilization rates reaching 102.8% in the second quarter of 2026 as legacy chip demand continues to outstrip existing supply.
Timeline
January 2026: Nexchip launched a Phase IV project.
June 2026: Nexchip increased foundry fees.
Q2 2026: HuaHong capacity utilization hit 102.8%.
October 19, 2026: TrendForce published its foundry market bulletin.
End of 2026: SMIC completes 40,000 wafer capacity expansion.
The Tech Race
The transition of 8-inch node capacity to China marks a departure from historic diversified sourcing, signaling a new concentration of legacy supply. This shift directly follows the production roadmap transitions outlined in the TrendForce October 2026 market bulletin.
Supply chain shifts for mature-node chips often lead to price fluctuations for electronics manufacturers sourcing older components. Companies relying on these legacy parts will likely face increased costs as Chinese foundries raise fees to match high utilization rates.
The takeaway
The move away from mature-node production is a structural shift by major players to capture AI market share. Industry analysts expect global 8-inch capacity to show negative growth through the first half of 2027.
Further reading
For more on the manufacturing landscape, visit the Semiconductors section.
Source note: This article includes information reported by Startup Fortune.
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