SMIC is stuck in a dilemma with imported equipment and domestic equipment topping it. (Photo source: SMIC official website)
SMIC is now in a dilemma. The purchase of any U.S. semiconductor equipment or components requires U.S. permission, and China’s domestic equipment is far from being able to top it.
Taiwan’s “Free Finance” quoted the mainland media “AI Financial News” as reporting on April 8, a senior semiconductor source revealed that “the difficulties faced by SMIC are much greater than imagined”, and the current situation is that “the export of U.S. equipment is stuck, and it takes time for domestic equipment to come up. The current situation is that “the export of U.S. equipment is stuck and it takes time for domestic equipment to come up.
At present, the original report of the mainland media has been taken offline on various mainland websites, and the webpage shows “404”.
According to the report, SMIC needs to import 90% of its equipment, of which U.S. semiconductor equipment accounts for nearly 60%, the rest is equipment from Japan and South Korea, and domestic equipment accounts for only about 10%.
The U.S. Department of Defense placed SMIC on the list of “Chinese military companies” on Dec. 3, 2020.
Richard Windsor, founder of research firm Radio Free Mobile, said, “SMIC is dependent on U.S. companies for resources to produce semiconductor chips. This puts SMIC’s operations in the hands of the U.S. Department of Commerce, which can decide whether to issue licenses on a case-by-case basis.”
On December 18 last year, the U.S. Department of Commerce placed SMIC on the list of U.S. entities and U.S. semiconductor equipment manufacturers stopped working with SMIC.
In March this year, there was news that SMIC was granted a supply license from some U.S. equipment makers, mainly covering semiconductor equipment required for mature processes.
But sources familiar with the matter said the supply of U.S. equipment has not returned to normal; for example, Applied Materials, the U.S. company that SMIC applied to purchase, “cannot ship even a single component from the U.S.”
SMIC was founded in 2000 and has since become China’s best-known chip foundry. Yet SMIC’s most advanced products are two generations behind its competitors, Taiwan Semiconductor Manufacturing Company (TSMC) and South Korea’s Samsung.
SMIC is currently unable to produce transistors as small as those competitors and therefore cannot produce state-of-the-art processors for the latest smartphones and other advanced gadgets, in part because of existing U.S. restrictions on the company.
The only way Center International can currently manufacture state-of-the-art chips is by using production equipment from Dutch company ASML.
While imported equipment is stuck, China-made equipment is unable to meet Center International’s production requirements.
According to the aforementioned source, there are many people in China who always have illusions, but according to his understanding, the U.S. equipment imports to SMIC will only get more and more stuck.
According to a number of semiconductor industry sources, the current situation is that U.S. semiconductor equipment companies export “every” product to SMIC, to get a license, including every spare part, need to fill out the export license, but the license is rejected or passed, without explaining the reasons.
Recent Comments