What's new

China eyes next-generation chip technology to take on global rivals

xizhimen

FULL MEMBER
Jan 20, 2012
784
-1
768
China eyes next-generation chip technology to take on global rivals
Bloomberg
March. 3 2021

In just two decades, China sent people into space, built its own aircraft carrier and developed a stealth fighter jet. Now the world’s youngest superpower is setting out to prove its capabilities once more — this time in semiconductors.

At stake is nothing less than the future of the world’s No. 2 economy. Beijing’s blueprint for chip supremacy is enshrined in a five-year economic vision, set to be unveiled during a summit of top leaders in the capital this week.

It’s a multi-layered strategy both pragmatic and ambitious in scope, embracing aspirations to replace pivotal U.S. suppliers — and fend off Washington — while molding homegrown champions in emergent technologies.

China wants to build a coterie of technology giants that can stand shoulder-to-shoulder with Intel Corp. and Taiwan Semiconductor Manufacturing Co. (TSMC), conferring the same priority on that effort as it accorded to building atomic capability.

While the specifics of that endeavor won’t emerge for months, comments by government officials, Party mouthpieces like the People’s Daily and state think tanks provide important clues about the envisioned road map.

The approach entails making do over the next five years or so with aging semiconductors, which are adequate for electric cars and even military applications but can’t run advanced smartphones and similar devices. That buys China time to focus on fields like so-called third-generation chipmaking not yet dominated by any particular country, and — Beijing hopes — to create an array of indigenous giants in areas including machinery, software and new materials.

The ultimate goal is to groom local alternatives to global linchpins like Cadence Inc. and Synopsys Inc. in design software and Europe’s ASML Holding NV in chipmaking gear.

“Semiconductors are a crucial sector in the information era that will lead the future of economic development,” Science and Technology Minister Wang Zhigang said at a press conference last week. “At the same time, China will strive to achieve self reliance and strengthen our own capabilities.”

China’s efforts have gained urgency because the Biden administration is escalating a battle against what it calls “techno-autocracies.” That could extend or even expand blacklistings that have banned key transactions with corporations from Huawei Technologies Co. to ByteDance Ltd. and Tencent Holdings Ltd.

To a country that imports $300 billion of chips annually, a worsening global shortage drives home the risk of relying on potentially hostile suppliers for the building blocks of everything from artificial intelligence to sixth-generation networking and autonomous vehicles.

It will take years for local companies to match foreign counterparts in manufacturing and design expertise, during which there’s no ready answer to the dominance of Japanese and American names in chipmaking equipment. Companies in China will still only supply 35% of the country’s domestic demand by the end of this decade, IDC analyst Mario Morales estimates.

They’ll also have to contend with Washington. The U.S. signaled it intends to go ahead with a Trump administration-proposed rule to secure the technology supply chain next month, a move that gives the Department of Commerce broad authority to prohibit transactions involving “foreign adversaries” like China.

“The United States and its allies should utilize targeted export controls on high-end semiconductor manufacturing equipment … to protect existing technical advantages and slow the advancement of China’s semiconductor industry,” the National Security Commission on Artificial Intelligence, headed up by former Google chairman Eric Schmidt, recommended to Biden and Congress this week.

The situation faced by Huawei, the country’s largest technology firm by revenue, underscores the leverage Washington wields. Once the world’s biggest smartphone-maker, Huawei was forced to sell its Honor division and run at close to minimum production capacity after it lost access to chips from the likes of TSMC under American regulations.

“It just stimulates the Chinese community to accelerate their internal developments and eventually they may come out even stronger,” said Luc Van den hove, president of the Imec research center in Leuven, Belgium, which focuses on innovation in semiconductor technology. “And I think that’s certainly a risk of trying to keep the two worlds further apart.”

Beijing had set aside at the start of its last five-year plan around 1 trillion yuan ($155 billion) for potential investment in semiconductors over five to 10 years, according to McKinsey. It will now continue to bankroll research and investment in coming years, Wang said last week. That should galvanize the much larger influx of private capital needed to produce genuine breakthroughs.

It’s an approach that’s worked before for the internet, where a mix of government and private capital helped build the likes of Alibaba Group Holding Ltd. and ride-hailing giant Didi Chuxing Inc. In February, the state-backed Global Times reported smartphone-makers Xiaomi Corp. and Oppo had acquired stakes in Jiangsu Changjing Electronics Technology Co., exemplifying the sort of private-sector involvement Beijing’s counting on.

When it comes to the chips, “we will see more support relative to private firms, because they play a bigger role in those sectors,” said Wendy Leutert, GLP-Ming Z. Mei Chair of Chinese Economics and Trade at Indiana University.

In the meantime, up-and-comers such as Semiconductor Manufacturing International Corp. (SMIC) and Tsinghua Unigroup can help tide the country over a deficit of mobile processors, memory and telecom modules should Washington close off supply routes.

They will mainly operate mature processes of 14 nanometers and older, sufficient for all but the most exacting applications such as smartphones, high-performance computing and graphics processors. Meanwhile, global leader TSMC is ramping up for mass production of 3 nm chips in 2022, about five or six generations ahead.

At the same time, they’ll act as focal points for the country’s most capable brains to work on stop-gap measures such as advanced packaging that can improve chip computing power in the absence of more sophisticated U.S. technology. The hope is that such fine-tuning will buy time for the homegrown development of advanced technologies, such as in 7-nanometer chips and silicon design software.

Some of the key local players in that space include Shanghai Micro Electronics Equipment Co. and Naura Technology Group Co., who are working on equipment that can someday replace ASML’s extreme ultra-violet lithography or EUV machines — a prerequisite for any advanced chipmaking.

Local startups like Empyrean are trying to replicate the similarly indispensable software tools licensed by Synopsys and Cadence, employed by most of the world’s chip designers from Intel on down. Even in the commoditized realm of memory, a subsidiary of state-backed Tsinghua Unigroup is spending billions on mass production to challenge Samsung Electronics Co. and Micron Technology Inc.

President Xi Jinping has pledged an estimated $1.4 trillion through 2025 for technologies ranging from wireless networks to AI. A big chunk of that is geared toward semiconductors.

Chinese firms such as Tsinghua will be responsible for building half the world’s 30-odd new fabrication plants, or fabs, in the next two years alone. It’s already spending 2.4 times more than the U.S. on semiconductor equipment, much of it made by American companies, Morales wrote in a report.

The bet is that China’s corporations will be able to compete if they accelerate research into burgeoning, adjacent fields like AI and quantum computing now.

That’s where third-generation chips come in. Those are mainly made of materials such as silicon carbide and gallium nitride, can operate at high frequency and in higher power and temperature environments, and have broad applications in fifth-generation radio frequency chips, military-grade radar and electric vehicles.

The country may secure first-mover advantage, even if traditional silicon-based semiconductors will continue to account for the vast majority of global use for the foreseeable future, Citigroup analysts have said.

U.S.-based Cree Inc. and Japan’s Sumitomo Electric Industries Ltd. are just beginning to grow such business, while Chinese rivals such as Sanan Optoelectronics Co. and state-owned China Electronics Technology Group Corp. have made inroads.

The country’s other chipmakers, which include SMIC, Will Semiconductor Ltd. and National Silicon Industry Group Co., benefit more broadly from the state support.

“The investment commitment that China is making ensures that the Chinese semiconductor ecosystem will continue to play an important role in the progress of our industry and the overall IT market,” said IDC’s Morales.

 

zectech

SENIOR MEMBER
Aug 12, 2018
3,283
-2
3,910
Country
Italy
Location
Netherlands
Party mouthpieces like the People’s Daily and state think tanks provide important clues about the envisioned road map.

What a hack of an article. This reads like some cia troll wrote it. :rofl:
 

CriticalThought

SENIOR MEMBER
Oct 10, 2016
6,529
17
6,818
Country
Pakistan
Location
Australia
These announcements by ASML should be taken into account. In my eyes, they represent a failure of the American sanctions in the face of big money.

Chinese chipmaker SMIC buys $1.2 billion in tools from ASML | Nasdaq
Chinese chipmaker SMIC buys $1.2 billion in tools from ASML
CONTRIBUTOR
Stephen Nellis Reuters
PUBLISHED
MAR 3, 2021 9:40AM EST
CREDIT: REUTERS/ALY SONG
Semiconductor Manufacturing International Corp, China's largest chipmaker, has agreed to buy $1.2 billion in manufacturing tools from ASML Holding NV, according to a regulatory filing on Wednesday.

All-new World Reimagined podcast
Listen Now
By Stephen Nellis
Sponsored Links


New South Wales: Solar Panels Are Almost Free, Thanks To The Government!3Quotes





March 3 (Reuters) - Semiconductor Manufacturing International Corp 0981.HK, China's largest chipmaker, has agreed to buy $1.2 billion in manufacturing tools from ASML Holding NV ASML.AS, according to a regulatory filing on Wednesday.
In December, SMIC was one of dozens of firms put on a U.S. blacklist that required American semiconductor manufacturing equipment firms such as Applied Materials Inc AMAT.O and Lam Research Corp LRCX.O to obtain a license before exporting products to the chipmaker.
The U.S. Commerce Department said the action against SMIC stemmed from China's efforts to harness civilian technologies for military purposes and evidence of activities between SMIC and Chinese military industrial companies of concern. The rules would still allow the shipment of tools for making less advanced chips.
ASML, which is based in the Netherlands and is the world's largest supplier of lithography equipment for making chips, produces a critical tool required to manufacture advanced chips: an extreme ultraviolet lithography, or EUV, machine.

In 2019, the Trump administration pressed Dutch officials to cancel a sale of an EUV machine to SMIC. At that time, Dutch officials declined to renew a license needed to ship the tool. Dutch officials had not approved a license to ship an EUV tool to China as of late February, according to government records.
ASML, which also makes tools for less advanced chips, did not immediately return a request for comment on which tools were included in the most recent sale.


In January, ASML Chief Executive Peter Wennik said the company could see "significant upside" selling older chipmaking technology to China if allowed by government officials to do so. China accounted for 17% of ASML's 14 billion euros in 2020 sales.
On Monday, the U.S. National Security Commission on Artificial Intelligence, or NSCAI, recommended that the United States coordinate with the Netherlands and Japan to deny export licenses to China for key chipmaking equipment.

"This (sale) is a slap in the face to the NSCAI recommendations and shows how big the gap with allies is on these issue," a U.S. semiconductor executive said on condition of anonymity.
(Reporting by Stephen Nellis in San Francisco and Toby Sterling in Amsterdam; Editing by Paul Simao and Jonathan Oatis)
((Stephen.Nellis@thomsonreuters.com; (415) 344-4934;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Clarification on SMIC volume purchase agreement | Nasdaq
Clarification on SMIC volume purchasing agreement

VELDHOVEN, the Netherlands, March 3, 2021 – A disclosure has been made by SMIC under Hong Kong listing rules regarding a Volume Purchase Agreement (VPA) with ASML. This relates to an existing agreement for DUV lithography that was already entered into on January 1, 2018 and that would run originally until December 31, 2020 and which was extended on February 1, 2021 to be valid until end December 2021.

The total amount of purchase orders under the VPA was completed in the past 12 months’ period from March 16, 2020 until March 2, 2021 – to an aggregate amount of $1.2 billion. The VPA, including its extension, is not a material event for ASML. We understand that the transactions contemplated under the VPA constitute disclosable events for SMIC under the Hong Kong Listing Rules.
 

Users Who Are Viewing This Thread (Total: 1, Members: 0, Guests: 1)


Top Bottom