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Hua Hong Semiconductor plans to acquire a 97.5% stake in Shanghai Huali Microelectronics for around RMB 8.27 billion, a move that consolidates China's semiconductor sector. This acquisition will add Huali's mature-node technologies and 38,000 wafers per month of capacity to Hua Hong's operations.

By the end of 2025, Hua Hong was the world's sixth-largest foundry, and this deal is anticipated to enhance its position in the market. The acquisition is supported by state-linked investment vehicles and aims to reduce fragmentation within China's foundry sector.

The consolidation reflects a broader trend of mergers and acquisitions among Chinese chipmakers to improve efficiency amid U.S.-led export controls and growing competition. Industry experts believe this will impact pricing dynamics in the mature-node foundry market.