A few days ago, news broke that SMIC’s 14nm process yields reached the 90% to 95% range, chasing the platform of TSMC. Market participants believe that SMIC’s financial reports have not been independently listing the 14nm revenue share, questioning the news.
Taiwan‘s Technology Newsline reported on March 11 that, according to mainland Chinese media, SMIC’s most advanced 14nm process yields are in the 90% to 95% range, catching up with TSMC. In this regard, market participants pointed out that if SMIC’s 14nm process yield really improved, it should vigorously promote its advantages, but the earnings report never made the 14nm revenue percentage independent, questioning the news from the Chinese media.
SMIC’s current state-of-the-art 14nm process achieved mass production in Q4 2019 and successfully assisted huawei in OEM Kirin 710A processor in the first half of 2020 and applied to the Honor Play4T phone. However, in May 2020, the U.S. expanded Huawei sanctions and SMIC was unable to continue to use U.S. equipment to OEM processors for Huawei.
In November 2020, SMIC co-CEO Meng-Song Liang said at an investor meeting that SMIC’s 14nm process has reached industry yields so far after mass production in Q4 2019. Shortly thereafter, the U.S. Department of Commerce announced on the evening of December 18, 2020, that SMIC and some of its subsidiaries and participating companies would be included in the entity list and that all applications for export of equipment and materials required for SMIC’s development of advanced processes below 10nm would be rejected outright. This has caused strong resistance to SMIC’s progress in developing advanced processes.
In early March 2021, according to foreign investment reports, there is news that SMIC has received permission to supply equipment for mature processes above 14nm from some US equipment manufacturers, but advanced processes are still not released. This means that while SMIC cannot continue to develop advanced processes below 14nm, mature processes above 14nm can continue to operate.
SMIC’s co-chief executive officer, Mr. Zhao Haiyang, said that SMIC will have completed its target of 15,000 monthly installations of 14nm process by the end of 2020, which is still far from the economy of scale, and if further expansion is needed, the export license application process will be required.
Reuters reports that despite the current global supply shortage leading to soaring chip demand, the U.S. government is still moving slowly in approving U.S.-based semiconductor equipment and materials vendors, including Lam Research and Applied Materials, to sell chip manufacturing equipment licenses to SMIC.
Foreign investors said that SMIC 28nm capacity utilization rate is full, 14nm can not be foundry for Huawei, and there is no customer replacement in the short term, the next one to two quarters is expected to be of little benefit to the market as a whole, 14nm process yields can really be produced to catch up with the platform TSMC, the future still needs to be observed.
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