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The US Department of Commerce reported that it had been brought against SMIC. On September 25, it required US chipmakers to obtain licenses before exporting certain technologies to SMIC. This move is bound to affect China’s advanced technological development.
The Wall Street Journal, Financial Times and Nikkei News reported on the 27th that the Commerce Ministry noted in a letter sent to the chip industry that technology exported to SMIC or its subsidiaries is at risk of being misappropriated by the Chinese military.
US sanctions threaten to cut off SMIC’s semiconductor manufacturing equipment supply chain. American companies are the main suppliers of this equipment. SMIC is supported by various Chinese state entities behind it, and is the leading enterprise for Beijing authorities to develop their own high-tech.
A spokesman for the Department of Commerce noted that the Bureau of Industry and Security (BIS), responsible for export control, “constantly monitors and assesses any potential threats that may endanger the national security and diplomatic interests of the United States. Currently, the Department of Commerce cannot comment on specific issues, but BIS and its interdepartmental partners will take appropriate action in accordance with the law.
A SMIC spokesperson said on the 26th that it will continue to maintain constructive and open contacts with the US Department of Commerce. SMIC reiterated that it will only manufacture semiconductors and provide services for civilians and commercial end users. The company has nothing to do with the Chinese military and will not manufacture products for the military.
An engineer from the SMIC chip production line revealed that the US action “is to be expected, but it will surely make our situation worse” and will also have a chilling effect on the domestic industry. SMIC has been developing its own 40nm chip production line to curb the impact of US sanctions. However, the engineer admitted that the industry’s prospects for self-sufficiency were “much more pessimistic” than analysts, saying “We feel very powerless.”
The US Department of Defense stated in early September that it would consider adding SMIC to the Department of Commerce’s list of entities. According to sources, the issues discussed in Washington include whether SMIC supports China’s national defense building. According to internal sources, it is the Pentagon’s proposal to blacklist SMIC. US pressure prevented SMIC from acquiring advanced wafer making equipment. ASML Holding NV, a leader in the Dutch semiconductor equipment industry, has been unable to obtain a license to export SMIC since last year.
According to statistics from the Semiconductor Materials and Equipment International Association (SEMI), American companies supply 45% of the world’s semiconductor manufacturing equipment. These companies include wafer inspection equipment maker KLA Corporation, semiconductor engraving machine maker Lam Research Corp.), and Applied Materials Inc., a leading semiconductor equipment maker.
It’s worth noting that while the Commerce Department has mandated US companies, the ban may be extended to foreign companies using US technology. Tokyo Electron supplies SMIC with etching machines and chemical vapor deposition equipment, while Screen provides cleaning equipment. As Chinese customers increase their investment, Tokyo Velico’s China-related sales increased 46% from April to June. Japanese companies like Nikon and Canon have also been promoting display machines to Chinese customers. It is currently unclear whether Japanese companies must also comply with US regulations.
In July, SMIC was listed on the Shanghai Stock Exchange’s Sci-Tech Innovation Board (STAR Market), known as the “Chinese version of Nasdaq,” the largest scale in China in 10 years. OPI case.
SMIC’s Shanghai plant just received state patronage in May. SMIC’s total fundraising this year is rumored to be close to US $ 10 billion, and the proceeds will be used to expand production and speed up the development process.
The main chips produced by SMIC are based on a 55 to 65 nanometer process, and the most advanced version uses a 14 nanometer process. TSMC currently uses a 5-nanometer process, and SMIC is completely out of date by 2 generations.
Credit Suisse noted that SMIC accounted for about 5% of the global foundry market in 2019, but some chips with older processes accounted for as much as 10%. It may take some time for competitors to fill the SMIC supply gap.
(MoneyDJ News authorized reprint of this article; source of first image: SMIC)
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