China's foundries have won the mature-node argument, not the self-sufficiency one

Chinese foundries' success in mature process nodes reflects a temporary market advantage driven by domestic demand for 28nm and above technologies, enabling full capacity utilization and profitability. However, this does not signal progress in advanced process development or key equipment, where reliance on foreign suppliers remains deep. The technical chain is now pushing local equipment vendors to accelerate R&D, yet breakthroughs are unlikely in the near term. Compliance risks are escalating due to U.S.-China tech decoupling, increasing operational costs for firms. Competitors may shift production to Southeast Asia or boost investment in alternative technologies to mitigate exposure. Over the next 12–24 months, margins in mature nodes may shrink, while progress in advanced processes will determine long-term industry dynamics.