The United States intends to expand restrictions on exports of semiconductor equipment to the mainland, banning the sale of deep ultraviolet (DUV) equipment, a key machine for the production of mature processes, the largest foundry in the mainland, SMIC will be the first to bear the brunt of the expansion plans will be limited, resulting in capacity constraints continue to boom, so that the main focus on mature processes, such as UMC (2303), the force of the Taiwan factory more sought-after.
SMIC is also the largest foundry of mainland coded flash memory (NOR Flash) leader Zhaoyi Innovation, the U.S. side to expand equipment export restrictions, SMIC’s future foundry for Zhaoyi Innovation synchronization blocked. At this stage, NOR chips are in short supply, prices are on the rise, Huabang, Macronix and other NOR chip factories will usher in more customers to switch orders, the price trend is even more unstoppable.
Huabang, Macronix recent performance is hot, the first quarter revenue hit a high. Industry sources pointed out that once SMIC obtains DUV equipment restrictions, is bound to make Huabang, Macronix influx of more orders, product price trend is more uncontrollable, driving the two companies revenue, gross margin continued up.
Korean media BusinessKorea reported that the U.S. Congress appointed the establishment of the National Security Council on Artificial Intelligence (NSCAI) has recommended that the U.S. government to prohibit the export of DUV and other technology equipment to the mainland. Previously, former U.S. President Donald Trump had banned the Dutch exposure machine maker ASML from exporting EUV exposure machines necessary for advanced processes to the mainland, hitting SMIC’s advanced process technology development layout hard.
Trump’s export restrictions at the time, did not include more than 7 nanometers, the production of mature processes necessary DUV equipment, with the U.S. Congress to support the request to expand the government’s export restrictions on mainland semiconductor equipment, and the ban extended to DUV equipment.
The industry believes that, in the United States Congress to support, the Biden government to expand the opportunity to shrink equipment exports to the mainland, the SMIC will be a major blow to the mature process-oriented UMC, TSMC and other Taiwan plants more sought after.
UMC common general manager Wang Shi previously analyzed, the epidemic led to laptops and other house economy demand, and make 4G conversion to 5G speed up the pace, related mobile devices to the IC with a large increase, coupled with the car market to reheat, these dynamics push up the 14nm above the foundry mature process oversupply.
At the same time, SMIC for the mainland’s largest NOR chip factory Zhaoyi innovation foundry capacity will also be affected. It is reported that Zhaoyi Innovation is commissioned by SMIC to OEM 10,000 wafers per month. If SMIC can no longer obtain DUV machines, it will inevitably focus its limited capacity on non-NOR chip business in the future, which will lead to a significant reduction in the NOR chips provided to Zhaoyi Innovation, and Huabang, Macronix, etc. will usher in more transfer orders.
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