--- title: "Morgan Stanley: China's wafer foundry capacity and chip supply will meet core sovereign demand around 2028" type: "News" locale: "en" url: "https://longbridge.com/en/news/278815739.md" description: "Morgan Stanley released a report stating that China has made progress in alleviating equipment and wafer foundry bottlenecks over the past year, and it is expected to meet core sovereign demands around 2028. Policy support will accelerate early development, but long-term value depends on commercial competitiveness. Chinese AI GPU suppliers need to demonstrate economic benefits to sustain growth. The report predicts that by 2030, the market size of China's AI chip market will reach $67 billion, with a self-sufficiency rate of 76%. The report is optimistic about companies such as SMIC, NAURA, and ASMPT" datetime: "2026-03-12T03:36:30.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/278815739.md) - [en](https://longbridge.com/en/news/278815739.md) - [zh-HK](https://longbridge.com/zh-HK/news/278815739.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/278815739.md) | [繁體中文](https://longbridge.com/zh-HK/news/278815739.md) # Morgan Stanley: China's wafer foundry capacity and chip supply will meet core sovereign demand around 2028 Morgan Stanley published a report on China's artificial intelligence (AI) image processors (GPUs), indicating that China has made substantial progress in alleviating equipment and wafer foundry bottlenecks over the past 12 months. It is expected that with policy support, China's wafer foundry capacity and chip supply will meet core sovereign demands around 2028. The report states that policy support can accelerate early development, but long-term value depends on commercial competitiveness. Chinese AI GPU suppliers must demonstrate compelling economic benefits to sustain growth beyond 2028. The analysis shows that with lower prices, cheaper electricity costs, and increasingly improved infrastructure, the total cost of ownership (TCO) for Chinese AI data centers is competitive. In the inference workload domain, the cost per code unit (token) is more critical than peak performance, further enhancing the competitive advantage of Chinese solutions. The firm believes that China's localized strategy to compensate for process technology disadvantages by expanding chip, wafer, and equipment scales is continuing to yield results. The optimistic scenario assumes that domestic GPUs will expand into training workloads and may gain overseas adoption; the pessimistic scenario assumes that the differentiation advantage fades, leading to commoditization and industry consolidation. The firm also predicts that the market size for China's AI chip sector will reach $67 billion by 2030, implying a compound annual growth rate of 23% from 2024 to 2030. It is expected that China's self-sufficiency rate for AI chips will reach 76% by 2030. The firm remains optimistic about China's AI semiconductor supply chain, including SMIC (00981.HK), NAURA (002371.SZ), and ASMPT (00522.HK), as well as AI chip investments that help strengthen the strategic layout of Chinese internet platforms ### Related Stocks - [SMIC (688981.CN)](https://longbridge.com/en/quote/688981.CN.md) - [ChinaAMC CSI Semiconductor Material & Equipment Thematic ETF (562590.CN)](https://longbridge.com/en/quote/562590.CN.md) - [ChinaAMC SSE STAR Semiconductor Material & Equipment Thematic ETF (588170.CN)](https://longbridge.com/en/quote/588170.CN.md) - [ChinaAMC Guozheng Semiconductor Chip ETF (159995.CN)](https://longbridge.com/en/quote/159995.CN.md) - [China Merchants CSI Semiconductor Industry ETF (561980.CN)](https://longbridge.com/en/quote/561980.CN.md) - [Guotai CSI All Share Integrated Circuit ETF (159546.CN)](https://longbridge.com/en/quote/159546.CN.md) - [Guotai CSI Semiconductor Material Equipment Theme ETF (159516.CN)](https://longbridge.com/en/quote/159516.CN.md) - [Harvest SSE STAR Chip ETF (588200.CN)](https://longbridge.com/en/quote/588200.CN.md) - [Harvest CSI All Share Integrated Circuit ETF (562820.CN)](https://longbridge.com/en/quote/562820.CN.md) - [E Fund CSI Semiconductor Material & Equipment Thematic ETF (159558.CN)](https://longbridge.com/en/quote/159558.CN.md) - [SMIC (00981.HK)](https://longbridge.com/en/quote/00981.HK.md) - [NAURA (002371.CN)](https://longbridge.com/en/quote/002371.CN.md) - [ASMPT (00522.HK)](https://longbridge.com/en/quote/00522.HK.md) - [GF Fund CSI Semiconductor Material Equipment Theme ETF (560780.CN)](https://longbridge.com/en/quote/560780.CN.md) ## Related News & Research - [Semiconductor Manufacturing International (0981): New Buy Recommendation for This Technology Giant](https://longbridge.com/en/news/278340633.md) - [Chip price hikes spread as Asia's chipmakers plan record spending](https://longbridge.com/en/news/278482077.md) - [AI X Tech Proposes Dropping Chinese Company Name](https://longbridge.com/en/news/278488333.md) - [Science parks’ combined revenue hits record NT$5.8tn](https://longbridge.com/en/news/278751818.md) - [Chinese brain interface startup Gestala raises $21M just two months after launch](https://longbridge.com/en/news/278816465.md)