A new survey shows that China is experiencing difficulties and slow progress in its quest to improve the localization of semiconductor chip production. Nikkei News interviewed more than 20 Chinese chipmakers during Semicon China2021, a semiconductor manufacturing equipment exhibition held in Shanghai, China, in March, and seven companies responded. Most of the interviewees said that their main products are products for manufacturing 14nm to 28nm chips, which are two or three generations behind the world’s advanced chips. Other companies interviewed said that even older generation semiconductor manufacturing machines are their main products.
Taiwan media “Taiwan News” reported that leading manufacturers such as TSMC (TSMC) and Samsung (Samsung) currently provide chips at 5 nanometers.
According to public information, most of the chips used in computers have adopted 10nm or 7nm process technology, and some manufacturers are able to produce 5nm chips. Smaller numbers indicate smaller and more advanced processor sizes.
The seven respondents who responded “candidly” acknowledged the delay in miniaturizing semiconductors. Ltd. is the only company that has successfully developed a product for the 5-nanometer cutting-edge technology, the Nikkei News reported.
China is currently the world’s top importer of computer chips. China’s high dependence on foreign technology has prompted its eagerness to accelerate the development of its local semiconductor industry.
Survey respondents told Nikkei that U.S. trade sanctions against China have made it difficult to obtain parts and materials from abroad. The use of Chinese parts and materials as substitutes has led to lower yields.
China’s State Council released relevant data last year showing that China’s chip self-sufficiency rate to reach 70% in 2025. U.S. research firm IC Insights predicted in January that by 2025, China’s chip self-sufficiency rate will only be around 19.4 percent, more than half of which will actually come from the Chinese subsidiaries of overseas manufacturers such as TSMC, South Korea’s SK Hynix and Samsung. When only Chinese companies are taken into account, the self-sufficiency rate drops to about 10 percent.
For Chinese companies, a bigger reason for the slow progress of chip localization is the U.S.-led sanctions against China. “When we can’t get just one core component, our product development will be greatly negatively affected,” said an engineer at Shanghai Microelectronics Equipment (Group) Co.
Officials at Shenyang Core Source Microelectronics Equipment Co. said, “Since it has become clear in the past few years that it is difficult to bring in technology from abroad, we will have to find solutions through our own efforts.”
The Chinese government under Xi Jinping has been investing heavily in subsidies for semiconductor projects across the country until 2020, but the money invested has yielded limited results and many projects have failed. The recovery of China’s semiconductor industry from its once fatal weakness is not seen as an easy task.
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