Chinese semiconductor industry

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manqiangrexue

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China's semiconductor task is nigh impossible:

"The manufacturing chain for any given semiconductor is extraordinarily complex and relies on as many as 300 different inputs, including raw wafers, commodity chemicals, specialty chemicals, and bulk gases; all
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and
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by
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of 50 different types of processing and testing tools. Those tools and materials are sourced from around the world, and are typically highly engineered. Further, most of
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in semiconductor manufacturing, such as
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and metrology machines, rely on complex supply chains that are also highly optimized, and incorporate hundreds of different companies delivering modules, lasers, mechatronics, control chips, optics, power supplies, and more. The “installed base” within a semiconductor factory today represents the cumulation of hundreds of thousands of person-years of R&D development. The manufacturing process that integrates them into a single manufacturing chain could represent hundreds of thousands more.

The types of products for which these manufacturing processes are designed are nearly as varied as the manufacturing inputs themselves. There are at least 20 major semiconductor product categories (from optical sensors to battery management modules to CPUs) and each category usually contains hundreds of different stock keeping units—distinct items for sale—for specialized applications. This complexity leads to a large market filled with myriad niches, in which specialized world-class companies have built defensible market positions through decades of targeted research and development.

Complexity also makes semiconductors a winner-take-all industry. The top one or two players in any given niche—whether a small one, such as furnaces, or a giant one, such as server CPUs—
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all the economic profits in that niche due to scale, learning efficiencies, and high switching costs for customers. It is rare to see newcomers break into these oligopoly positions. For instance, the market leader in graphics processing units (GPUs), Nvidia,
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the segment in 1999 and never relinquished its lead. While China has early-stage startups in the GPU segment, its market share is essentially zero. TSMC, based in Taiwan, was the first dedicated competitor in the foundry segment and has not relinquished its lead in its 33-year history. Indeed, SMIC, China’s leading competitor in the foundry segment,
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four or five years behind TSMC in technology, despite almost two decades of investment."

Even if China succeeds in becoming 100% independent, it will still fail, because:

For one thing, the economics of an “only in China for China” supply chain do not work. Even if Chinese companies at each stage of the value chain win 80% of potential business from every potential Chinese customer, Chinese companies would collectively generate less than 15% of the industry’s overall R&D capacity—and likely less as prices in China tend to be lower, leaving less profit to re-invest in R&D. Such an indigenization strategy would still leave China behind the rest of the world: How can products developed with 15% of the world’s R&D compete with those from entrenched companies spending collectively far more? Of course, PRC government subsidies can and are closing that funding gap. But keeping such large-scale subsidies in place for the decades required to build the industry would likely generate a set of companies so dependent on government largesse that they may not be commercially viable.

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This is why, at the end of the day, this is not a purely technological or economic problem. China needs allies and good foreign relations abroad so that its companies have access to markets, supplies, talent, and R&D from other countries to reinforce its own. This is not optional; it is mandatory.
LOLOL The author has so little confidence in his assessment (or rather wish) that China cannot develop its own indigenous lines that he couldn't even let himself have an imaginary moment to rest; he had to put a "even if they could, they couldn't blah blah" clause! If I had a nickel for every time a Western institute or person predicted China's failure but were proven wrong, I could have my own indigenous semiconductor and lithography company.
 

gadgetcool5

Senior Member
Registered Member
You are the reason there has to be serious revision to this forum's rules. You simply can't be allowed to keep trolling like this and any rules that permit it have to be changed.
By posting a think tank article on the topic of the thread is "trolling"? This article has more information on the matter at hand than the last 2 pages of posts!
 

daifo

Captain
Registered Member
This is why, at the end of the day, this is not a purely technological or economic problem. China needs allies and good foreign relations abroad so that its companies have access to markets, supplies, talent, and R&D from other countries to reinforce its own. This is not optional; it is mandatory.

The world seems to be shifting away from the US so their companies and personal do not suffer arbitrary sanctions and criminal prosecution.
 

manqiangrexue

Brigadier
By posting a think tank article on the topic of the thread is "trolling"? This article has more information on the matter at hand than the last 2 pages of posts!
It has a lot of old and wrong information. At a simple glance, I see that it claims that SMIC is 4-5 years behind TSMC but Dr. Liang already said that SMIC's design for 3nm is already completed, just waiting for the lithograph, which TSMC cannot produce either.

His whole argument is summarized as, "It's really really hard." LOL There's no valuable insight at all.
 

daifo

Captain
Registered Member
Well the 8080 came out in 1974 and China was able to clone it by 1978... China was only four years behind then, unlike being 15+ years behind now. Amazing to think that despite all of China's economic growth it has actually lost ground since 1978.

Loongson 3a4000 is only 7-10 years behind with 28nm process. Good enough for 'office work' but prob overpriced for its performance.
 

gadgetcool5

Senior Member
Registered Member
It has a lot of old and wrong information. At a simple glance, I see that it claims that SMIC is 4-5 years behind TSMC but Dr. Liang already said that SMIC's design for 3nm is already completed, just waiting for the lithograph, which TSMC cannot produce either.

His whole argument is summarized as, "It's really really hard." LOL There's no valuable insight at all.
TSMC does not need to produce the lithograph because it has the soft power to get it without producing it. So it can focus on its core competency which is absolutely correct. SMIC on the other hand must produce the lithograph because it cannot get it due to China's bad relations with the West. But it cannot.

You are right that it has old and wrong information and SMIC is not 4-5 years behind TSMC. It is 15 years behind TSMC because all of Dr. Liang's designs and even its 14nm and mature node products cannot be produced without Western equipment. Dr. Liang's work has basically been entirely wasted. The article was too generous to SMIC.
 

gadgetcool5

Senior Member
Registered Member
By the way, TSMC is
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. Meanwhile SMIC
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. How will SMIC catch up to TSMC while spending only 1/5th the amount of capital investment? The reality is SMIC will never catch up at this rate. Instead it will fall further behind TSMC. This year it is 15 years behind, next year it will be 16 years behind...
 

manqiangrexue

Brigadier
TSMC does not need to produce the lithograph because it has the soft power to get it without producing it. So it can focus on its core competency which is absolutely correct. SMIC on the other hand must produce the lithograph because it cannot get it due to China's bad relations with the West. But it cannot.
SMIC doesn't have to produce the lithograph either because SMEE and apparently other Chinese companies will take care of the lithograph. TSMC doesn't have soft power; it's just too tiny to be a challenge so nobody bothers to squish it. Just because you can walk around outside without someone caving your face in doesn't mean you have soft power. You don't even know what soft power is, do you? LOL
You are right that it has old and wrong information and SMIC is not 4-5 years behind TSMC. It is 15 years behind TSMC because all of Dr. Liang's designs and even its 14nm and mature node products cannot be produced without Western equipment. Dr. Liang's work has basically been entirely wasted.
You can't even compare 2 things because your head is so full of bullcrap. SMIC and TSMC are in line with each other and their semiconductor designs are compared. It's not SMEE+SMIC being compared to ASML+TSMC. If Dr. Liang's work is wasted, then it's a waste to produce any components to any machine awaiting the final assembly. Your spinning is the waste here and it will convince no one.
The article was too generous to SMIC.
This forum is too generous to low-quality posters like you.
By the way, TSMC is
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. Meanwhile SMIC
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. How will SMIC catch up to TSMC while spending only 1/5th the amount of capital investment? The reality is SMIC will never catch up at this rate. Instead it will fall further behind TSMC. This year it is 15 years behind, next year it will be 16 years behind...
Hanjian like you can say 200 years if it makes you feel better but still, imaginary numbers don't mean anything. There may be a lull in spending as it waits for the lithograph. When SMIC needs it, when any Chinese semiconductor/lithography can use it, the CCP can give it a capital investment boost comparable to the GDP of a small country.

The dumbest part about your posts here (there are dumber parts elsewhere) is that there are posters like WTAN giving live updates to China's progress that you can't find on Western news and you're still specifically seeking out the "analysis" of people who have a track record of being wrong every time on China, regurgitating the shallow crap that they say like it's fact. China has always and will always innovate what is denied to it and put your Western dung-eating arguments on borrowed time.
 
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Hendrik_2000

Lieutenant General
All of those western projection has been proven wrong over the decades From A Bomb to satellite, Weapon embargo, AWAC, satellite, Economy, political stability, Covid 19, CCP you name is and I have no doubt they are wrong again in Semiconductor. So all those hubris and breast beating is a sleeping pill to get them good night sleep since they worry so much about China rise . I have no doubt Chinese engineer ,scientist will overcome this challenge it is no more difficult than A bomb, Nuclear Submarine or Jet engine just wait. They make strategic mistake depending on western supply chain but that is not government fault the industry is short sighted. If anything it is a silver lining and a good awakening call and weaken the pro west in Chinese people. And for the like of Amac, KLA, Lam research they can kiss goodbye for future income stream
 
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Oldschool

Junior Member
Registered Member
@gadgetcool5
I understand your concern. No need to catch up to the leading edge stuffs. Just need to walk its own path and control its cost.
Third world countries best cellphone currently only use 14nm. Probably won't able to afford 7nm or EUV products for a very long time.
14nm enough for 5g base station , desktop and server running on Linux. Enough to sustain the country . Leading edge cellphone just use mediatek or Qualcomm. No big deal.
 
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