Chinese semiconductor industry


gelgoog

Brigadier
Registered Member
I stumbled into this article from last year while I was looking on information about Taiwanese Foundry Powerchip. Quite telling.
You have what is basically the US Ambassador in Taiwan trying to squeeze the local factories even at events like this.
Why else have a US government representative attend the opening of a Taiwanese semi fab in Taiwanese soil?

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Mar 26, 2021​

Powerchip Semiconductor Manufacturing Corp (力積電) yesterday held a groundbreaking ceremony for a NT$278 billion (US$9.72 billion) fab in Miaoli County, to raise capacity as it is struggling to keep up with demand for its chips.
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President Tsai Ing-wen, second right, Powerchip Semiconductor Manufacturing Corp chairman Frank Huang, right, and others attend a groundbreaking ceremony for a new fab in Miaoli County yesterday.
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The fab would create 3,000 new jobs and, when fully utilized, generate NT$60 billion in production value, it said.

Huang said that Taiwan offers the most competitive environment for semiconductor firms, with production costs lower than in other countries, including China.

“For decades, Taiwan has been a trusted manufacturer of semiconductors,” American Institute in Taiwan Director Brent Christensen said at the ceremony. (note: "American Institute in Taiwan" is basically the US Embassy there)

President Tsai Ing-wen (蔡英文) has identified the semiconductor industry as a strategic priority, not only for economic innovation, but also for national security, Christensen said, adding that the US government agrees with that view.

Last month, as one of his first executive orders, US President Joe Biden launched a review process of supply chains for critical and essential goods to make them more resilient and safe, Christensen said.

Building resilience for the US means increasing domestic production of certain equipment, he said.

However, that would also entail closer cooperation with trusted partners that share the same values as the US, Christensen said, adding that this would ensure that supply chain access cannot be leveraged against the US.

To forge stronger economic ties with Taiwan, as well as ties in fields of cooperation, the two nations last year launched the US-Taiwan Economic Prosperity Partnership Dialogue, Christensen said.

The dialogue is part of a broader coalition to counter China’s unfair economic and investment policies, he said.

Christensen also encouraged investment from Taiwanese semiconductors companies across the entire value chain — design, foundries, assembly and supply.
 
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tokenanalyst

Captain
Registered Member
(1) China relied too much on businesses to go their way. But companies follow their rules, that are business rules, not geopolitical rules. And (2) leaving localization of lithography machine to a small and resources limited company like SMEE has been a mistake. SMEE developed some machine already ten years ago, but when these machines did not materialize in volume production, this should have rang an alarm bell, that didn't ring until very recently. China has a huge
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, with tens of thousands of scientist and researchers. They underestimated the problem and the complexity of a litho machine and now China found itself relying on a small and sovereignty-limited European state, which is trying its best to resist the tiger. China should not find itself hoping in Dutch government!
1- SMEE is just an integrator and is collaborating with other companies like U-Precision, CNEPO, CheerTech, DJAL, RSLaser and many others to make their systems.
2- semiconductor manufacturing equipment is codevelop with the fabs, ASML tools has been codevelop with Samsung, TSMC , Intel and even SMIC. So if Chinese foundries like SMIC and HHGrace are unwilling to collaborate with Chinese lithography companies like SMEE to invest, test, debug and use their products so SMEE products can evolve, they only have themselves to blame for the dependency on a company caught in a geopolitical storm. SMEE time and investment would be better in areas were they are really making money. The same goes for the dependency on US made equipment.
 

gelgoog

Brigadier
Registered Member
I think the Chinese government needs to boost efforts into making Chinese tools capable of mass production and competitive. Facilities like the ICRD at Shanghai should be expanded in scope. And there need to be policies to improve Chinese tool competitiveness. Perhaps specific low interest rate loans for expanding tool production and a special fund for doing tool R&D.
 

sunnymaxi

Senior Member
Registered Member
I think the Chinese government needs to boost efforts into making Chinese tools capable of mass production and competitive. Facilities like the ICRD at Shanghai should be expanded in scope. And there need to be policies to improve Chinese tool competitiveness. Perhaps specific low interest rate loans for expanding tool production and a special fund for doing tool R&D.
its already begun. above discussion about how Chinese firm neglect tools manufacturing in past and didn't coordinate each other.

i have post this many times.

government mobilizing national resources for core technology breakthroughs in key fields like semiconductors tools.

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olalavn

Junior Member
Registered Member
1- SMEE is just an integrator and is collaborating with other companies like U-Precision, CNEPO, CheerTech, DJAL, RSLaser and many others to make their systems.
2- semiconductor manufacturing equipment is codevelop with the fabs, ASML tools has been codevelop with Samsung, TSMC , Intel and even SMIC. So if Chinese foundries like SMIC and HHGrace are unwilling to collaborate with Chinese lithography companies like SMEE to invest, test, debug and use their products so SMEE products can evolve, they only have themselves to blame for the dependency on a company caught in a geopolitical storm. SMEE time and investment would be better in areas were they are really making money. The same goes for the dependency on US made equipment.
that's why China need to refresh their 28nm fabs all over China... rebuild it compatible with EDAs and domestically manufactured equipment... it will take a long time to completely refresh ... but China has that ability.
 

tphuang

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Actually China is in hurry, as it should be because it's a race against time.

US will never stop.

After they will successfully ban DUV, they will move forward to ban any kind of Western of equipment: once US companies do not sell in China anymore, even the last reason to hold back with bans will vanish and they will go full decoupling. History taught us many times that US startegy is always very simple and straightforward: they don't indulge in nuances or subtleties. Their strategy is always brute-force: There's one thing I don't like? I kill it.

I agree with @BoraTas here, EU will never retaliate. The strategy of Europe is to slowdown and water down as much as they can. Europe's goal is to buy time....and this goes at advantage of China. too.

But once US will enforce the ban, Europe will not retaliate, and ASML will be forced to comply. This has nothing to do with what is legal or what is fair. This is pure power-play.

TSMC future is bound to US, they will depend more and more on US. TSMC will became a kind of US company, maybe not formally, but de facto. They will lose any strategic independence. The reason for TSMC to build a 3nm fab in US (people included) seems to be a strong push by Apple that does not want its most critical supply chain to depend on a shaky, small island. US and Intel will harvest TSMC fully.

China should just "surf" the decoupling wave, remaining always a bit ahead of the latest ban, be always a bit faster in localizing than US is in banning, so that the wave does not overwhelm them.

In hindsight, I can see two big miscalculations.

(1) China relied too much on businesses to go their way. But companies follow their rules, that are business rules, not geopolitical rules. And (2) leaving localization of lithography machine to a small and resources limited company like SMEE has been a mistake. SMEE developed some machine already ten years ago, but when these machines did not materialize in volume production, this should have rang an alarm bell, that didn't ring until very recently. China has a huge
Please, Log in or Register to view URLs content!
, with tens of thousands of scientist and researchers. They underestimated the problem and the complexity of a litho machine and now China found itself relying on a small and sovereignty-limited European state, which is trying its best to resist the tiger. China should not find itself hoping in Dutch government!

...but in hindsight everything is very easy.

The big mistake is that Huawei did not jump into lithography sooner. If it had, it would do better job than SMEE now. But, it's really not too late for them still. I think longer term, they will have their own Arfi scanner and lead the effort in EUV. btw, I'm not a Huawei fanboy at all. Just stating what I think is the obvious.

Also, I agree with your point about China being in a rush. SMIC is publicizing their mature node expansion plans, but their Capex investment does not corroborate with that story at all. SMIC Capex is like 7 to 8 times as high as Huahong grace despite capacity expansion being just 50% more (or something like that). So, they are clearly investing in advanced node production. SMIC somehow managed to just pull $1.6 billion out of the thin air to buy more ASML machines. ASML delivery in October just happens to double vs a year ago. All of this are signs to me that Chinese gov't is pushing for more aggressive advanced node production. ASML must have spent good of money to develop 2050i and then 2100i. I doubt they will recuperate their investment without sell at least 10 to 20 of them each. I expect them to fast track these orders while Dutch gov't hold off on implementing new export controls. You don't need 2050i/2100i for 28/22 nm production. These are going toward FinFet production. Yield might not be great, but should be better than if they are using 1980i scanners.

The best thing China can do for ASML is just publicizing their successes in Arfi scanners. Then, pressure for Dutch gov't will be off I think.
 

tphuang

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that's why China need to refresh their 28nm fabs all over China... rebuild it compatible with EDAs and domestically manufactured equipment... it will take a long time to completely refresh ... but China has that ability.
They are not going to slow down their FinFet production just because SMEE equipment is not at the same level as ASML machines or others. It's nice to have all the 28nm+ 12-inch fabs, but they also need to massively ramp up their FinFet production.

As for existing 28nnm fabs in China, I don't see the need to refresh them with domestically manufactured equipment. They are adding so much capacity that every machine coming off NAURA and AMEC are probably accounted for. The day that domestic manufacturers can support 90% of domestic need is the day they can start thinking about replacing foreign equipments in existing fabs.
 

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