Chinese Science and Technology

Chip of contention: China struck back in the sanctions war, by Dmitry Migunov for Izvestia. 09.25.2023.

Beijing began to respond to US bans in the semiconductor sector.

China has achieved new successes in its confrontation with the United States over chip production. In March 2023, Huawei CEO Eric Xu said that the Chinese semiconductor industry would be “reborn” as a result of US sanctions. Then the businessman’s words were taken as polemical exaggeration, but six months later the company introduced technological innovations based on its own production. Huawei has successfully developed the architecture for processors in its new smartphone, and SMIC has begun producing microchips using 7-nanometer technology - one of the most modern and sufficient for the production of most computer equipment. Progress is going faster than analysts predicted, and America failed to stop the Chinese semiconductor industry with sanctions. Details are in the Izvestia article.

Plank at 7 nm

Reports that Shanghai-based Semiconductor Manufacturing International Corporation (SMIC) has achieved 7nm chip manufacturing technology have been appearing over the past few months. The analytical company TechInsights said in August that the Chinese produce many chips for mining machines (ASICs) that are similar to the products of Taiwanese TSMC, the largest semiconductor manufacturer in the world.

For a long time, it was believed that SMIC was only capable of small-scale production. But in early September it became known that 7-nanometer Kirin 9000s processors were installed in the new flagship smartphone Huawei Mate 60 Pro.

The phone has already reached the mass market, and now there is no doubt about SMIC's ability to produce chips in huge quantities. The company itself states that in 2023 it intends to produce 15 million phones with Kirin 9000s chips, and in 2024 production will increase almost fivefold - to 70 million.

New achievements do not yet allow the corporation to quickly regain leadership in the smartphone market in China (for comparison: TSMC produces 200 million processors a year for Apple alone), but given the growth rate of chip production, the prospects are quite decent.

Note that Huawei, unlike SMIC, has been under direct US sanctions for several years , but has succeeded in developing chip architecture for its own phones. Four of the eight processors powering the Mate 60 Pro are native Huawei designs, while the rest are licensed from British ARM. The latter provides the design of most processors in smartphones of various brands. The exception was Apple, which independently works on the design of its chips. Now there is a new player in this league.

For Huawei, this is a critical step to overcome tough US sanctions. Any interaction with foreign corporations, including ARM, now carries risks, since it is unclear at what point US Commerce Department lawyers can demand compliance from the corporations involved. However, in the case of ARM, this may not be easy, since the company has a joint venture in China, and it does not fully control it.

Mature industry

The emergence of new processors also indicates the maturity of the Chinese industry, which has not existed for many years. Huawei, by the way, designed these chips based on the architecture of processors for servers in data centers. Such a transition has not yet been achieved by any of the corporations operating in this industry.

At the same time, this also indicates the very limited success of the sanctions pressure that the United States has undertaken against the Chinese semiconductor industry. When Washington introduced export controls on the supply of semiconductor products to China last October, some analysts assumed that such strict measures could set China back years, if not decades.

But already in March, flash memory manufacturer YTMC announced the launch of a new plant in Wuhan with the intention of soon doubling production volumes (previously it was about 100 thousand chips per month). Now this company, which was considered almost the main “victim” of American restrictions, occupies about 5% of the relevant market and is in sixth place in the world. Its growth rate is such that YTMC can meet all of China's NAND memory needs (necessary for SSD drives) by 2025.

It was believed that sanctions would deprive China of the ability to produce 7-nanometer chips, which are among the most advanced (although 3 nm and 5 nm processes already exist, and the latter have gone into mass production).

Making such chips requires state-of-the-art photolithography machines using EUV (extreme ultraviolet) technology, which China did not have. However, it turned out that such chips can also be produced using lithography machines with DUV (deep ultraviolet) technology. This is slightly less effective, but the difference in cost can be easily compensated with the help of small subsidies, which is quite justified in conditions of trade pressure.

In addition to lithography, there are other equipment and components for extremely complex chip production. Today it is provided by almost the entire world. But here export control is completely useless, since all equipment can equally be used both for advanced 7 nm technological processes and for simpler ones “allowed” by the American administration.

The situation with photolithography is different, and here control mechanisms can be effective, since there are essentially no alternatives to equipment produced by the Dutch ASML on the market. However, there are a number of nuances here too. Blogger Dylan Patel, popular among those interested in the topic of semiconductors , notes that even next-generation technological processes (5 nm) are within the capabilities of the Chinese with the equipment that they can obtain without violating existing restrictions. They will most likely be able to have working 5nm chips by 2025 and mass produce them within the next year or two.

In addition, China continues to develop its own photolithographic production. In August, Shanghai SMEE announced the start of production of its own machine with a 28 nm process technology, which is a leap through several steps at once - until recently, the Chinese capabilities in this area were limited to 90 nm machines.

Only a complete ban

In fact, the only way to stop the development of the Chinese semiconductor industry would be comprehensive restrictions on almost the entire range of equipment and components, says Dylan Patel. In practice, this does not seem realistic: justifying such a gesture would be incredibly difficult, it would lead to multi-billion dollar losses for corporations from the Netherlands, Japan, South Korea and at the same time could entail extreme retaliatory measures from China - the United States and European countries are largely dependent on supplies from China rare earth elements and other vital metals.

Apparently, the current “sieve sanctions” will continue and will continue to complicate, but not stop, the work of the Chinese industry. That is, they will not in any way interfere with the development of China’s research in the field of artificial intelligence. As for the military sphere, it will not suffer at all: in 90% of cases, chips that are primitive by today’s standards are more than enough for it, which China and a number of other countries can produce “from start to finish” without including foreigners in the production chain at all.

What does this mean for the world at large? The practice of the “chip war” of recent years has shown that maintaining the spread of technologies, even no matter how complex, is an almost impossible task. Something else is more interesting. In the world of rampant globalization in the 1990s and 2000s, the sector developed an almost perfect division of labor, with semiconductors produced by a global effort.Now the US attempts to return the industry to its homeland, on the one hand, and restrictions on China, on the other, are leading to the fact that this market is beginning to fragment. This may result in some reduction in production efficiency. But the reverse side of the process will be increased competition, which, regardless of the results of the confrontation between powers, will be a big win for all consumers of the products of this most important industry of our time.

https://iz.ru/1577718/dmitrii-migunov/chip-razdora-kitai-nanes-v-voine-sanktcii-otvetnyi-udar

China Chipmaker Says it Is Replacing Sanctioned Tools Rapidly

According to the founder of one of China's leading etching equipment manufacturers, Advanced Micro-Fabrication Equipment (AMEC), the US's import restrictions will only negligibly impact his companies' capacity to operate. More specifically, Gerald Yin said that around 80% of imported (and now restricted) equipment could be replaced by domestic alternatives by the end of the year. In fact, Yin said AMEC estimates it could resume full operational capacity by the second half of 2024 - a result of China's billion-yuan drive to achieve semiconductor self-sufficiency.

AMEC expects to reach a 60% domestic dominance for the capacitively coupled plasma (CCP) etching equipment market in the next few quarters - a significant increase from its 25% overall market share as of October 2022. But the company is also eying the inductive coupled plasma (ICP) tool market - and aims to control three quarters of it almost as fast.

Kiko wrote:China’s New Loonsong Processor Blows Intel Out of Water, Secures Beijing’s Tech Sovereignty

GarryB wrote:The dutch seem to hold a monopoly, but what are they actually doing to improve the technology over time and what are their areas of expertise to take it further?

I honestly think it is a good thing for China and Russia and other countries to develop technologies to push the technology forward and even if they don't get smaller, they can work out how to reduce costs and make it faster to produce chips that cost less.