China could capture up to 42% of the mainstream chip market by 2028 amid AI demand

China's semiconductor industry could occupy up to 42% of the global mass-market chip market by 2028. The boom in artificial intelligence, which many associate solely with expensive accelerators and market leaders, unexpectedly opens a window of opportunity for Chinese manufacturers in a broader and more applied segment.

Why the forecast is changing

For a long time, the Chinese semiconductor industry was perceived as a laggard: it lags behind Western and Taiwanese players in advanced processes, equipment, and access to critical technologies. But the current wave of AI is changing the very structure of demand. Money goes not only into the most powerful GPUs for training large models, but also into a vast layer of components without which it is impossible to scale servers, devices, networks, and edge AI systems.

Against this backdrop, the argument about "hopeless backwardness" no longer appears universal. If the market is growing rapidly, not only technological leaders win, but also those capable of consistently producing large volumes of in-demand solutions at predictable prices. For China, this is especially important: local companies can increase their presence where record characteristics are not the deciding factor, but manufacturing capacity, local supply chains, and the ability to quickly meet internal market demand.

Where China is strengthening

When it comes to mass-market chips, the advantage often goes not to the most innovative, but to the most scalable producers. In this segment, the winner is the one who can quickly ship large batches, maintain prices, and work with mature manufacturing processes without constant pursuit of the smallest process node. This is exactly where Chinese companies plan to monetize the AI boom, even if competing with global leaders in the top accelerator segment remains challenging.

• Mature processes suitable for consumer electronics, industrial equipment, automobiles, and IoT devices
• Enormous internal demand from Chinese manufacturers of devices, servers, and digital infrastructure
• Supply chain localization against the backdrop of sanctions and trade restrictions
• Price competition, delivery schedules, and willingness to accept large batch orders

This does not mean China automatically becomes a leader in the most complex AI chips. Rather, it is a different scenario: capturing the largest possible share in those categories where artificial intelligence creates secondary, but massive waves of demand. The wider AI is embedded in consumer electronics, cameras, automobiles, factory automation, and edge devices, the more accompanying semiconductors are needed, and the stronger the position of manufacturers capable of producing them quickly and in large volumes.

How AI changes demand

The spread of AI increases demand not only for computing power in the cloud, but for the entire hardware ecosystem around it. Data centers need controllers, power electronics, network components, and memory; AI functions in smartphones and PCs require energy-efficient chips and modules; industry and transportation require specialized microchips for sensors, communications, and local data processing. It is precisely this "long tail" of components that creates a market where scale plays no less a role than technological exclusivity.

The material emphasizes that demand for services from Chinese chip manufacturers grows as AI becomes more widespread. This is an important signal: the market is beginning to perceive China not only as a country trying to catch up with leaders, but as a major manufacturing platform for a new wave of electronics. If the forecast of a share up to 42% by 2028 comes true, this will become not just an industry statistic, but evidence that the AI revolution is redistributing revenues throughout the hardware creation chain.

What this means

For the market, this means one simple thing: it is really possible to profit from AI not just on the most expensive and scarce accelerators. China is betting on the mass-market segment, where volume, cost, and delivery speed are often more important than absolute technological leadership. If this strategy works, competition in semiconductors will intensify not only at the top of the market, but in its broadest, most everyday, and commercially sustainable foundation.