Taiwan Semiconductor Manufacturing Company currently rules the global computer chip industry. The manufacturer focuses heavily on building the most advanced technology possible at record speeds. This strategy helps the massive factory build strong, long-term business deals with trillion-dollar giants like Apple and Nvidia.
Building millions of incredibly small 3-nanometer and 2-nanometer silicon wafers is definitely a massive technical achievement. However, the founder of China’s largest chip manufacturer thinks the industry looks at success the wrong way. Richard Chang, the founder of Semiconductor Manufacturing International Corporation, recently shared his unique thoughts in a new interview. He clearly called the current industry obsession with tiny chips a massive misconception.
Chang pointed out a surprising mathematical reality about the global technology business. Right now, the artificial intelligence boom forces everyone to look at advanced 2-nanometer and 3-nanometer designs. Yet, Chang noted that these highly advanced manufacturing processes actually account for less than 20 percent of the entire global chip market.
Instead, he highlighted where the real money sits. Older, mature manufacturing processes actually drive more than 80 percent of the world’s daily technology demand. Everyday electronics, cars, and appliances desperately need these basic parts. Chang believes that companies ignore these massive niche sub-markets, creating a perfect opportunity for his company and other domestic manufacturers to step in and make big profits.
Many people think that surviving in the semiconductor business means fighting a brutal war over the newest advanced processes. They believe a company only wins when it finally creates a 3-nanometer or 2-nanometer chip. Chang firmly rejects this idea. He argues that domestic Chinese manufacturers can achieve incredible breakthroughs simply by targeting the boring niche markets that overseas companies currently monopolize.
To win this fight, Chang says factory leaders must prioritize their daily tasks. He tells business owners that they do not need to do everything at once. Instead, they should find one specific bottleneck problem in the supply chain and solve it perfectly. He believes achieving true excellence in a single niche market contributes far more to the industry than just copying everyone else.
He views this strategy as a much more practical way to grow. Right now, hundreds of companies crowd into the exact same popular technology tracks and fight over the exact same customers. Chang wants domestic chipmakers to focus on cultivating the missing links in the supply chain instead of burning money in a crowded arena.
This same logic applies directly to the explosive artificial intelligence market. Chang watches everyone focus completely on giant cloud computing data centers. Meanwhile, he says the industry largely ignores distributed artificial intelligence. This means the market still lacks the specific, scenario-based hardware that normal devices need to run smart programs locally.
He specifically warned new artificial intelligence startups about their current business plans. Many young companies currently burn through millions of dollars in venture capital funds trying to fight the massive tech monopolies head-on. Chang advised these startups to completely avoid this dangerous path. He wants them to build scenario-based applications that actually solve everyday problems instead of wasting cash.
This mature market strategy fits perfectly with his own company’s current reality. China currently struggles to fight massive players like TSMC and Samsung because of strict global trade rules. These rules prevent SMIC from buying the advanced Extreme Ultraviolet machinery they desperately need. Without these massive machines, a factory simply cannot produce chips smaller than the 5-nanometer mark.
Because they only have access to older Deep Ultraviolet equipment, SMIC remains permanently stuck at the 7-nanometer production level. They cannot build the chips that Apple or Nvidia want. However, by looking at the remaining 80 percent of the market as a massive financial opportunity, Chang proves his older factories still serve a highly profitable purpose in the global supply chain.
