TSMC supremo Morris Chang is worried that the Chinese will soon be a major threat to other foundries, like his own.

Most of China’s success is because government incentives were encouraging local foundries to expand their 12-inch production capacity. Most of the new 12-inch fab capacity in China will be 28nm or more mature technologies, Chang warned.

TSMC intends to offer its broad mix of technologies to support a wide range of product applications which will help the Taiwan-based company counter its competitors in China, Chang said. But more than a tenth of the company’s R&D is spent on enhancing its mature process differentiation.

The outfit recently added embedded flash memory (eFlash), sensor and other features into its logic processes to enhance the company's specialty technology capability.

He thinks that the six process variants TSMC uses will give the outfit the edge in 28nm technology. In the advanced process segment, TSMC's pure-play foundry business model will enable the company to better compete with its rivals, according to Chang.