[Rabbit] China's countermeasures have proven effective, but it has led Japan to discover a shocking fact. Japanese media exclaimed: “70% of the global mature process orders are continuously flowing to Chinese factories, with prices so low that it makes us doubt life!”

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Japan's sense of loss is not without reason. For decades, Japan has held an important position in the chip supply chain. Although it no longer dominates advanced processes, it still retains certain advantages in mature processes, power management chips, sensors, and other fields.

The Japanese originally thought that the “cabbage chip” of mature processes would not be linked to competing with TSMC and Samsung’s advanced processes, which easily cost billions of dollars. They believed the industry risks were low, and profits were stable, making it a market that could be steadily profitable in the long term. However, China's explosive growth in this area has completely exceeded their expectations.

The fact is that China did not suddenly rise; it has quietly accumulated production capacity for more than a decade. From the Yangtze River Delta to the Pearl River Delta, from Wuhan to Chengdu, numerous wafer fabs have been continuously put into production, blooming from 8 inches to 12 inches. China did not just invest resources in the “bottleneck links” of advanced processes but found breakthroughs in mature processes. Especially against the backdrop of an increasingly tense international environment and a restructured supply chain, mature processes have become a “key lock” that every country must rely on.

To put it more bluntly: mobile phones, cars, home appliances, industrial control, the Internet of Things… virtually all electronic products that consumers can truly touch and use are inseparable from mature processes.

It is not the high-end 5nm or 3nm, but the lifeline that the industry cannot do without. Precisely because of this, when China began to implement countermeasures, coupled with the continuous sanctions from the United States on Chinese companies forcing the international supply chain to reassess risks, a large number of global orders naturally tilted towards Chinese factories with lower prices and more stable production capacities. This is not an emotional choice, but a tangible economic law.

What makes Japan feel even worse is the two major forces behind China's cost advantage in mature processes. The first is scale; the density and expansion speed of China's wafer fabs are simply unattainable for Japan. The second is a complete supply chain; China not only has manufacturing but also materials, equipment, packaging and testing, power costs, and massive domestic demand support, forming a fully internal circulation industry structure. No matter how precise and stable Japan is, it does not have this “full-chain pressure.”

The Japanese media's mention of “prices so low that it makes us doubt life” is not an exaggeration; it represents a fundamental change in the way of industry competition: Japan relies on equipment precision, while China relies on scale and efficiency; Japan depends on technological tradition, while China depends on rapid iteration and market demand. In the past, Japanese companies were accustomed to being fed by high profits, but now they have to face the reality of Chinese factories being “faster, more, and cheaper,” which of course shocks them.

More critically, China's mature processes are not just cheap; what worries the outside world the most is stability. Japanese media have noticed that many multinational corporations are rearranging their supply chains for security, willing to make long-term bets in China, placing more importance on stability than cost. China's wafer fabs can maintain delivery capability for many consecutive years; they will not be disrupted by political risks, will not halt due to natural disasters, and will not sway due to geopolitical conflicts. This kind of stability is exceptionally scarce in today's world.

When China gradually dominates mature processes, it will in turn accelerate breakthroughs in the localization of upstream materials and equipment, forming a stronger capability for industrial self-evolution. This is the biggest danger signal for Japan.

Because once China fully gains the upper hand in mature processes, Japan’s originally proud advantages in semiconductor materials and equipment will also be impacted by the shift in global order flows. The supply chain is “fed” by orders; once the demand focus shifts eastward, the original advantages will quickly be marginalized.

Therefore, the surprise expressed by Japanese media is not just about order losses, but realizing a more brutal reality: they thought “blocking China could stabilize upstream advantages,” but it has turned into “handing over the mature process market to China.”

The chip industry has never relied on slogans but on capacity, cost, market, and stability. China's ability to take on 70% of the global mature process orders is not because it is cheap, but because no one can bypass China.