China’s second largest foundry hires former Intel executive to lead advanced node development

Hua Hong Semiconductor, China’s second-largest chip foundry, has made strategic leadership changes to prioritize logic chip production and develop more advanced process technologies. The company hired Bai Peng, a veteran in logic chip technology, and appointed it its president on January 1, 2024, reports Nikkei. 

Bai Peng, who spent over three decades at Intel and led logic chip development from research to mass production, is expected to steer Hua Hong’s shift toward advanced semiconductor production technologies. Hua Hong are one of China’s few foundries to offer 40nm fabrication process along with SMIC. While 40nm is a fairly sophisticated technology, it cannot enable modern processors for AI, HPC, and client computing applications. The task for Bai Peng will be to advance Hua Hong’s manufacturing processes. The report says that Bai’s expertise aligns with the company’s focus to develop fabrication nodes essential for AI and other high-end applications. 

Hua Hong has historically focused on power semiconductors, analog chips, and embedded memory products, with most of its offerings at 100nm or larger. Hua Hong’s financial performance has declined since its 2022 peak due to falling legacy chip prices, which are particularly vulnerable to market fluctuations. As a result, declining prices has pushed the company to diversify into logic chips, a market currently dominated by a few Chinese companies, including SMIC.

To expand its production capabilities, Hua Hong acquired a former GlobalFoundries facility in Chengdu, China, in 2023 and began operations in 2024. Additionally, a new plant in Wuxi is now producing chips of 40nm and above. These expansions aim to position Hua Hong as a key player in both legacy and advanced chip markets. 

Hua Hong held approximately 2% of the global foundry market during the third quarter of 2023, according to TrendForce. For now, the share is small, but the company certainly wants to change that. STMicroelectronics, a leading European chipmaker, announced plans to outsource some production to Hua Hong last year, which highlights the increasing recognition of Hua Hong’s manufacturing capabilities. 

The parent company, Huahong Group, has also undergone leadership changes. Tang Junjun, previously president, was promoted to chairman. Tang brings extensive experience from his tenure at a joint venture between Huahong Group and NEC. Additionally, Qin Jian, who led Shanghai Alliance Investment — a significant Hua Hong shareholder — became the parent group’s chairman in December 2023. 

These appointments have fueled speculation about a potential collaboration between Hua Hong and SMIC, China’s largest and most advanced foundry. Such a partnership could bolster China’s efforts to build a self-reliant semiconductor ecosystem, reducing dependency on foreign supply chains.