AI and Advanced Packaging Propel China's Chip Industry Growth

Artificial intelligence integration and advanced packaging technologies are anticipated to significantly accelerate China’s semiconductor manufacturing sector. By 2028, China aims to command approximately 42% of the global wafer fabrication capacity for mainstream processes.

At Semicon China, the premier global semiconductor industry exhibition, new data forecasts a substantial expansion of China's semiconductor fabrication capabilities. The country is projected to increase its share of wafer fabrication capacity to nearly half of the world’s total by 2028, reaching about 42% in mainstream process nodes. This growth is largely driven by advancements in agentic artificial intelligence (AI) applications and cutting-edge packaging techniques, which are critical to enhancing chip performance and integration density.

Agentic AI refers to systems capable of autonomous decision-making and optimized manufacturing processes in semiconductor fabrication. This technology facilitates higher efficiency and precision in chip production, enabling China’s fabs to compete globally. Meanwhile, advanced packaging solutions improve interconnect density, thermal management, and power efficiency, which are vital for meeting the demands of emerging applications such as 5G, AI acceleration, and high-performance computing.

Leading Chinese manufacturers, supported by government policies aiming for technological self-reliance, are investing heavily in these domains. The strategic emphasis on AI-enhanced manufacturing and sophisticated packaging methods not only boosts capacity but also improves chip quality and innovation potential. This positions China to reduce dependency on foreign chipmakers and enhance its role in the global semiconductor supply chain.

Ultimately, China’s focus on integrating AI and advanced packaging aligns with global industry trends emphasizing heterogeneous integration and smart manufacturing. It signals a transformative phase for the country’s semiconductor sector, augmenting its competitive edge and shaping future technological trajectories worldwide.