Since launching its "Made in China 2025" initiative, China has made notable progress in building a domestic semiconductor ecosystem, with companies like SMIC and CXMT producing 7nm-class logic chips and competitive memory devices. But alongside these achievements, a wave of high-profile failures has resulted in dozens of abandoned wafer fabrication plants—so-called "zombie fabs"—plaguing the country's tech ambitions.

As of early 2024, China had 44 operational semiconductor fabs, including 25 300mm plants. Another 32 fabs were under construction. But behind these numbers lies a harsher truth: at least a dozen multibillion-dollar projects have collapsed due to lack of expertise, poor planning, fraud, and overreliance on government subsidies.

Notable Failures

Projects like Wuhan Hongxin Semiconductor (HSMC) and Quanxin Integrated Circuit (QXIC) illustrate the risks of overreach. HSMC aimed to leap directly to 14nm and 7nm production with a $19 billion budget but collapsed by 2021 after construction disputes and a cash crunch. QXIC, launched as a sister project, never progressed past the planning stage.

GlobalFoundries’ Chengdu Fab is another cautionary tale. Originally a $10 billion joint venture, the project was abandoned in 2018 after just the shell was built. While later revived by Shanghai’s HLMC in 2023, it remains one of the rare recoveries among dozens of dead fabs.

Jiangsu Advanced Memory Semiconductor (AMS) was launched in 2016 to produce phase-change memory (PCM). Despite initial progress, it went bankrupt in 2023 after failing to pay workers or fund equipment. A rescue deal collapsed in 2025.

Tsinghua Unigroup—once central to China's memory ambitions—saw both its 3D NAND and DRAM expansion plans scrapped after defaulting on billions in debt. The company’s former 3D NAND project aimed to mirror YMTC, while the DRAM venture enlisted ex-Elpida CEO Yukio Sakamoto before financial troubles halted progress.

In Fujian, Jinhua Integrated Circuit (JHICC), a DRAM venture, was effectively shut down after U.S. sanctions cut access to key technology. Though not officially closed, the fab operates only nominally, with no clear roadmap.

Several other projects, including Dehuai Semiconductor, HiDM, and Tacoma Semiconductor, were halted due to corruption, lack of viable technology, or vanishing executives. Some never progressed beyond land prep or pitch decks.

Underlying Causes

Many of these failures stemmed from attempts to shortcut the years of R&D and supply chain development typically required in chipmaking. Some projects targeted advanced nodes without securing access to tools or experienced talent. Others depended heavily on provincial funding, often with little oversight.

U.S. export controls imposed since 2019 further complicated matters by cutting access to sub-10nm-class manufacturing tools. This, combined with deteriorating U.S.-China relations, made it even harder for Chinese fabs to advance in logic and memory technologies.

The Bigger Picture

While companies like SMIC and YMTC have made meaningful strides, China’s growing graveyard of unfinished fabs underscores the limits of state-driven industrial policy when not matched by executional capability. Semiconductor manufacturing demands not just money, but sustained expertise, supply chain depth, and long-term strategy—qualities still developing across much of China’s chip sector.

Until those foundations are stronger, zombie fabs may remain a costly reminder of the country’s uneven path to tech self-reliance.