When Taiwan's Powerchip Technology entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market.
Nine years later, however, that Chinese foundry, Nexchip, has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing's localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels.
Nexchip is among Chinese foundries quickly winning market share in the crucial $56.3 billion industry of so-called legacy or mature node chips made on 28-nanometer technology and larger, a trend that prompted the administration of former U.S. President Joe Biden to initiate an investigation and is alarming Taiwanese industry.
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