Opinionated - China Chipping Away to Semiconductor Dominance

[Martian2]

Semiconductor showdown: TSMC, Intel, Samsung, Global Foundries, IBM, SMIC, and UMC

This thread is for people who are interested in semiconductors. I'll start with two posts about SMIC and TSMC's 16nm FinFET. Afterwards, I'll start analyzing the strengths and weaknesses of the various competing firms. Also, I will illuminate the reasons behind TSMC's current technological lead and evaluate the probability of other companies in closing the gap.

In essence, this thread will keep an eye on the semiconductor industry and keep track of who's winning or losing.
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SMIC is China's largest semiconductor manufacturer. Its future prospect looks really good.

Firstly, SMIC derives an astounding 40 percent of its revenue from China. With a strong home market, SMIC will continue to prosper as the Chinese economy grows at 7.5% annually.

Secondly, SMIC has caught up to Global Foundries, Samsung, and UMC at 28nm. This means SMIC is no longer confined to the low end of the semiconductor industry. SMIC can now compete at the middle of the market, which comprises the bulk of industry sales.

In October 2011, TSMC was the first foundry to mass manufacture wafers (and chips) at 28nm. TSMC was able to charge a premium for about two years until Global Foundries and Samsung caught up in technology and yield.

In January 2014, TSMC transitioned to a more advanced 20nm process. Currently, Qualcomm and Apple are paying a premium to mass manufacture chips with TSMC's 20nm technology. 28nm has become a commodity and no longer commands a premium.
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SMIC caps two-year turnaround with record-high earnings | South China Morning Post

"SMIC caps two-year turnaround with record-high earnings
by Bien Perez
19 February, 2014

SMIC's wafer foundry in Shanghai expects more orders for chips on the back of China's 4G mobile network expansion. (Photo: Bloomberg)

Semiconductor Manufacturing International Corp (SMIC), the mainland's largest contract chipmaker, expects business in its core mainland market to pick up later this year on the back of the country's 4G mobile network expansion and the growing adoption of smart cards.

"We expect more significant ramp-up in 2015," SMIC chief executive Chiu Tzu-yin said in a conference call with analysts yesterday.

The once-struggling, Shanghai-based company capped a remarkable two-year turnaround under Chiu when it reported record earnings for the 12 months to December.

Its net profit last year rose 660 per cent to a record US$173.2 million, from US$22.8 million in 2012, due to strong demand from customers on the mainland, increased wafer revenue and greater use of capacity at its chip fabrication plants.

China continues to be a source of high growth … 40.4 per cent of our total revenue

CHIU TZU-YIN, SMIC CHIEF EXECUTIVE

Revenue increased about 22 per cent to a record US$2.07 billion from US$1.70 billion in 2012.

'China continues to be a leading source of high growth for SMIC,' Chiu said. 'In 2013, China accounted for 40.4 per cent of our total revenue.'

Mainland customers consist of domestic 'fabless' semiconductor companies, which design chips and outsource fabrication to semiconductor foundries like SMIC.

The company's biggest multinational customers include Texas Instruments and Qualcomm, which supply most of the essential semiconductors used in smartphones.

Inventory correction, however, saw SMIC post a 68.5 per cent year-on-year decline in fourth-quarter net profit to US$14.68 million. Revenue advanced 1.2 per cent to US$491.79 million.

In a research note, Bernstein Research forecast SMIC's 40/45-nanometre foundry process, which primarily makes chips for applications such as smartphones and media tablets, would contribute up to 25 per cent of total revenue this year, compared with 13 per cent last year.

Bernstein said it expected further growth for SMIC to come from capacity expansion. Last June, SMIC formed a US$3.6 billion joint venture with Beijing's municipal government to build a new chip fabrication plant in the capital.

SMIC's capital expenditure this year will reach US$880 million, of which US$570 million will be for the Beijing project."

 

[tranquilium]

One of the major hurdles to overcome is the x86 structure patents. Without it, Chinese companies cannot produce chips to support windows operating system without violating copy right law. Since majority of the home PCs today run windows, it is going to take a lot of effort. This is one of the main reasons why Chinese semiconductor companies and indeed pretty much every late comer into the business tends to focus on mobile phones and other platforms first, because there is significantly less amount of patent block involved.

As for generations, the current main stream personal PC series from intel core i3, i5 and i7 runs from 45nm to 22nm, so 28nm from China would put it ahead Quad Core, but slightly behind i3, i5, i7. So you are looking at about three years or half a generation.

 

[antonius123]

One of the major hurdles to overcome is the x86 structure patents. Without it, Chinese companies cannot produce chips to support windows operating system without violating copy right law. Since majority of the home PCs today run windows, it is going to take a lot of effort. This is one of the main reasons why Chinese semiconductor companies and indeed pretty much every late comer into the business tends to focus on mobile phones and other platforms first, because there is significantly less amount of patent block involved.

As for generations, the current main stream personal PC series from intel core i3, i5 and i7 runs from 45nm to 22nm, so 28nm from China would put it ahead Quad Core, but slightly behind i3, i5, i7. So you are looking at about three years or half a generation.

I think you are talking about chip design? while Martian is talking about semiconductor foundry technology?

China has mobile phone chip designer like: Rockchip, Allwinner, HiSilicon, TCL. It will be good if those chip made with 14 nm.

 

[tranquilium]

I think you are talking about chip design? while Martian is talking about semiconductor foundry technology?

China has mobile phone chip designer like: Rockchip, Allwinner, HiSilicon, TCL. It will be good if those chip made with 14 nm.

Basically, there are three parts of the semiconductor industry, design, manufacturing and sales. Design involves the lay out of the micro-circuit diagram, placement of the devices and components, etc. This part, while technically challenging, is not difficult. Lots of the countries and companies can manage it.

The second part, manufacturing is where the biggest technical challenges lay and that is what Martian is talking about. The 45 nm, 28 nm and 22 nm are all benchmarks of manufacturing technology where the companies can create transistor of that particular scale on silicon wafers. Last time I checked (which, unfortunately, is about two years ago), the newest technology at the time is 14 nm and it has some very interesting stuff involving quantum tunneling) When we are talking about "generation" for chips, we are actually talking about different stages of manufacturing technology. Roughly speaking the microprocessor generations and the corresponding years can be seen as follows:

• 10 µm – 1971
• 3 µm – 1975
• 1.5 µm – 1982
• 1 µm – 1985
• 800 nm – 1989
• 600 nm – 1994
• 350 nm – 1995
• 250 nm – 1997
• 180 nm – 1999
• 130 nm – 2002
• 90 nm – 2004
• 65 nm – 2006
• 45 nm – 2008
• 32 nm – 2010
• 22 nm – 2012
• 14 nm – 2014

SMIC is at 28 nm, so roughly at 2011-2012 level of US chip manufacturing. It is behind intel core and core 2's 22nm technology, but ahead of the quad core's 45nm technology.

The third part, sales, isn't technical, but nonetheless an extremely important part for civilian microchip companies. Like I said before, vast majority of the PC today uses windows, which require chips designed using x86 patents. This blocked a lot of companies from taking large shares of the market, especially those from the developing nations. This is why even though China has mega computer manufacturers like lenovo, its chip producers are still not a match for intel.

Of course, we are only talking about personal PC here. The mobile phone and military chips are another story entirely. There isn't near much patent blocks in mobile phone market and there is zero patents in military industry, thus the countries can make chip as advanced as they can.

 

[UKBengali]

@flamer84 :

Think this may interest you.

China can design and manufacture the CPU/GPU required for modern computers.

 

[flist3773]

@Martian2 I think what China should do is opt for the crown jewel of this industry - high performance computing (i.e. supercomputer). The chips that are used in such supercomputers are not the one that we see in our daily products (i.e. desktop PC or notebooks. I am not going to even talk about the CPUs used in the mobile as they are less than $20). For instance, the bulk of Intel's revenue comes from corporate sides, not the consumer. Inte's Xeon processor is priced at four digits and its margin of profit from Xeon processor is enormous.

ARM is not going to compete with Intel in this market. (its per core performance is comparable to Atoms...)

Furthermore, China's home grown chips are based on Alpha and MIPS, which are far better than Intel's x86 or ARM. I am certain that we should be able to compete successfully with Intel and tech companies based on ARM in the foreseeable future.

Also Martian2, what do you think of Samsung? Do you think it is really innovative? I do know some Koreans and they all have this nationalistic mind (more nationalistic than Japanese in my view) about how Samsung is the most innovative and others are not...
I have looked at their source of revenue and most of their revenues are coming from household electronics and phones. I had a chance to use Samsung's own software program called 'kies" and it contained so many errors that I had to reboot my PC and in the end I magically lost 3 Gb in my hard disk... In my view, Samsung is just a sub - contractor factory that is totally dependent on the foreign (read: Americans) companies and it is at the mercy of foreign capitals / companies.

 

[eazzy]

Next 2015 supercomputer might get Chinese chips if I remember well.

 

[tranquilium]

@Martian2
Also Martian2, what do you think of Samsung? Do you think it is really innovative? I do know some Koreans and they all have this nationalistic mind (more nationalistic than Japanese in my view) about how Samsung is the most innovative and others are not...
I have looked at their source of revenue and most of their revenues are coming from household electronics and phones. I had a chance to use Samsung's own software program called 'kies" and it contained so many errors that I had to reboot my PC and in the end I magically lost 3 Gb in my hard disk... In my view, Samsung is just a sub - contractor factory that is totally dependent on the foreign (read: Americans) companies and it is at the mercy of foreign capitals / companies.

I may be wrong on this, but I remember reading that sometimes around 1997 where was a major financial crisis in South Korea (but somewhat independent of the 97 southeast Asia financial crisis) where the Koreans have to accept an IMF bailout and have to sign over a lot of their control over their own financial sector and Samsung was one of the target of the bailout.

 

[cirr]

SMIC to delivery 14nm readiness by the end of 2Q2016。

 

[bolo]

I may be wrong on this, but I remember reading that sometimes around 1997 where was a major financial crisis in South Korea (but somewhat independent of the 97 southeast Asia financial crisis) where the Koreans have to accept an IMF bailout and have to sign over a lot of their control over their own financial sector and Samsung was one of the target of the bailout.

Well depends on what you believe, the 1998 financial crisis made SK lose their sovereignty as the IMF bailouts forced them to lose control of their financial sector

 

[Developereo]

Alpha and MIPS, which are far better than Intel's x86

"Better" is a complicated word.

RISC (reduced instruction set computer) chips like Alpha and MIPS tend to be faster than CISC (complex ...) chips like x86, but that extra speed comes with trade-offs, by imposing more discipline and burden on the software using it.

Personally, I love the instruction set and register windows on the SPARC (another RISC chip), but programming for it requires extra care.

 

[antonius123]

SMIC to delivery 14nm readiness by the end of 2Q2016。

Very interesting. Any source about it?

 

[xunzi]

Very interesting. Any source about it?

SMIC's 2013 Technology Symposiums Kicks Off in Shanghai

First of Two China Symposiums Highlights SMIC's Quality, Innovation & Value-added Service

SHANGHAI, Sept. 4, 2013 /PRNewswire/ -- Semiconductor Manufacturing International Corporation ("SMIC"; NYSE: SMI; SEHK: 981), mainland China's largest and most advanced semiconductor foundry, kicked off its 13th technology symposium series in Shanghai today. The theme of this year's series is "Advanced and Value-added Technology Platforms for Your Vision."

Dr. Tzu-Yin Chiu, Chief Executive Officer of SMIC, gave the opening address. He showcased SMIC's achievements in the past two years and outlined its commitment to aggressively close its technology gap with other top foundries while continuing to offer comprehensive, value-added IC solutions in line with market trends to meet customer demand.

Dr. Haijun Zhao, Chief Operating Officer of SMIC, shared success stories from SMIC's initiatives to enhance yields, optimize product mix, shorten cycle times, and ensure product quality. He said quality and reliability are built into all SMIC's processes, from technology development to production, to ensure high performance. He referenced SMIC's receipt of international certificates and other recognition as evidence of its continuous pursuit of quality.

Dr. Shiuh-Wuu Lee, SMIC's Executive Vice President of Technology Development, explained SMIC's development goals and innovative use of differentiated technology. After highlighting SMIC's 40nm production ramp up since 4Q2012, Dr. Lee said that SMIC's 28nm process will be ready by the end of this year and that its 20nm HKMG development will help deliver 14nm FinFET technology by the end of 2Q2016. Dr. Lee also expressed strong confidence in China's IC market and emphasized SMIC's specialty technologies that target the China market. He said SMIC will continue to support domestic equipment and material vendors and collaborate with university and research institutes.

The Shanghai symposium featured SMIC's latest manufacturing offerings and technology developments on SMIC Design Support Solutions, analog/RF PDK, IP platforms for high speed application processors, eNVM platforms targeting China Market, and more. The symposium also featured an exhibition with more than 50 SMIC partners displaying their products and services, including libraries and IP, EDA tools, packaging, testing, design service, and others. More than 500 IC design engineers, customers, design service providers, and SMIC technology partners from around the world were in attendance.

John Peng, Senior Vice President and General Manager of SMIC's China Business Unit, delivered closing remarks thanking the attendees for their long-term support and partnership. He expressed SMIC's unwavering commitment to accelerate technology development, optimize product-mix, ensure on time delivery, and improve product quality and operational efficiency. He said SMIC will forge long term partnerships and strive to earn customer trust by providing quality service.

SMIC's next technology symposium is scheduled for September 14th in Beijing. For more information about the 2013 SMIC Technology Symposiums, please email your inquiry to symposium@smics.com or contact your SMIC account manager.

CONTACT:

Angela Miao
Semiconductor Manufacturing International (Shanghai) Corp.
021-38610000 ext.10088

SMIC's 2013 Technology Symposiums Kicks Off in Shanghai
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We are still trailing behind if Intel continues to shrink its chip size in 2016.

 

[shuttler]

Next 2015 supercomputer might get Chinese chips if I remember well.

We have done that earlier but the supercomputer is not the fastest though

Made in China: Country's new supercomputer uses homegrown chips | Cutting Edge - CNET News
October 29, 2011

This is something we can truely cheer about when it comes, hopefully soon!

What China's supercomputing push means for the U.S.
China is developing its own software and building its own infrastructure to create a tech industry, says a top computer scientist at the DOE's Argonne National Laboratory
By Patrick Thibodeau
June 10, 2013 06:00 AM ET

China's latest supercomputer, which may be officially cited as the world's fasted when Top 500 global rankings are released mid-month, is running Chinese- made interconnects and software. China-made CPUs are up next, Beckman said.

Tianhe-2 or Milkyway-2, which will have 3.1 million cores, has a theoretical speed of almost 55 petaflops. It's been tested so far at nearly 31 petaflops. A petaflop is 1,000 teraflops, or one quadrillion floating-point operations per second. An exascale system is 1,000 petaflops.

Beckman, in an interview, explains the significance of China's moves, and the power problem facing the push to exascale.

What does China's new system say about that nation's HPC technology development? It is a very clear statement of how serious they are with respect to scientific computing. If you look at their history of investment, this is just one data point in a much longer series of investments.

Was there anything about the home grown elements of this system that caught your attention? The network, and that's a pretty significant part. They have a front-end processor that's their own processor. They have slowly and incrementally woven in their own technology. They designed the interconnect from scratch, and they designed a software stack. They are taking their own approach on how to do parallelism. The two items that make the supercomputer super, the software and the interconnect, they are growing at home. The chips are well on their way. Once they have a chip that competes well it won't just be used for supercomputers.

Will China's next system have homegrown chips? I think so. I suspect that there is a national pride issue happening here as well. They will really work, in my opinion, to make a top machine that will be all (homegrown) tech from top to bottom -- the software, the interconnect and the CPU.

There is international cooperation in developing a software stack for an exascale system. Are the Chinese going their own way?They want to build their own components. They are not racing toward what is the most expedient, easiest way to deploy something. Inside the messaging layers, there were pieces that they were inventing, that they were doing over -- doing a different way. My impression is that their intent is obviously to collaborate and work with the community, but they really want to grow many of the components in-house.

Are they sharing any of this as open source? At this point it's pretty hard to see it. The software that the community is using, none of it is coming from China. It's hard to find, in some sense, on the Web. If you look for some of the pieces like the Kylin (Linux) operating system, it's not easy to find a community of people where this is being used or shared. It's certainly not prevalent yet. Maybe that's to come. I don't want, in some sense, to sell them short. It's very hard to document code in English if you're really writing essentially in Chinese. There may be language issues preventing them from doing this.

The new Chinese system will use 24 MW (megawatts) at peak when cooling is considered. What are your observations about its power use?That's an awful lot. The raw number is staggering when you think it's about $1 million per year per megawatt. That machine at peak would run $24 million a year in electricity. The goal for exascale is in the 20-30 MW range. In some sense, this shows that if we do nothing, we're stuck at this power rating.

Is there any agreement about how to lower power? There are several promising venues. One is the integration of memory on the chip. Right now, memory accounts for a healthy fraction of that power, and having it external to the CPU wastes power. Pulling it on to the CPU, that memory, with 3D chip stacking or other techniques, will make a big dent.

The other promising technology: Right now, all of our system memory is RAM, and RAM is very inefficient in terms of power. There are technologies that several companies are developing that could use NVRAM. It might not be quite as fast as RAM but the power difference is spectacular, so with that in mind, you can imagine developing systems in the future where some fraction of the memory is actually NVRAM, a smaller fraction of overall memory is RAM, and we get a big power savings. But the thing that we haven't tapped into at all really is managing power as a resource from the software. We just don't have a way right now to automatically move up or down the power in order to take advantage of processors being idle or not idle in a large HPC computation. So there are a lot of software changes that have to happen.

How will the power software management work? Google just wrote a paper, The Tail at Scale. When you do a Google search, it is searching several different servers for little bits of information that are then all pulled together, and that result is then sent back to you. So let's say that there are 20 machines that have to be touched, and a little bit of data from each of the search pieces is assembled and sent back to you. If one of those machines, and this is the part about the tail, comes back with an answer in a slightly longer time, the end result of the query is as long as the longest component. That's frustrating. We find that a little bit interesting, because [Google has] rediscovered what in high-performance computing we have known for a couple of decades, which is this concept of bulk synchronous computation, where you send out hundreds of thousands of tiny work objects to be done, one on each CPU, and if any one of those hundreds of thousands of chips runs slower, any one of them, then your result is as slow as the slowest one.

Let's say you paid $100 million for your machine, and you have all of those CPUs working hard on your problem, and one of them is slightly slower, then it's like degrading the value of your machine by 50% or more. That's how we do many of the computations right now. In terms of power management, the compiler, and the code, and runtime system have to cooperate in deciding when we can speed processors up and when we can slow them down. It can't be a self-deciding component.

What you try to do is make sure all the processors run at exactly the same speed, and they always return the answer at the same speed, so you don't have any lagging slowdown processor, or you try to cull [the laggards] out before they even run. Sometimes there are ways to determine that there are parts of a machine that aren't running as fast. But sometimes it's not so easy to do that.

With the size of memory that we have today, some part of your machine is likely to be correcting a single bit error at any given moment. Single bit errors can be detected and corrected automatically, well, it still takes a few CPU cycles so that means that that processor is still going to be late, just a fraction, to the computation because it had to clean up this fault. As we move to lower power, we also recognize that faults go up. The closer you are to operating at the jagged edge, the threshold of computing, the more noise there is in the system, and therefore the more faults there will be. This issue is quite a complex one.

What impact do you think China's new system will have, or should have on exascale development in the U.S.? My personal hope is it is a demonstrator of how hard work and investment in technology is important to China, and how that should be important to the U.S. as well.

It isn't just exascale. It's this notion that cutting-edge large science systems in computation drive a lot of research and lot of industry. Our investment in this space is really key to remaining competitive and being the innovators of this space. One of the things that's interesting about China's announcement, in my opinion, is they geared up this company, Inspur, to sell these machines inside China. They are building the infrastructure to churn out these systems within China and the question is then, who is next? Will they be shipping any to India? Will they eventually have the expertise to ship these to Brazil and to other countries?

So in sum, is it correct to say that China is accomplishing multiple things here: They are getting their science together, fueling a new IT industry, and are potentially creating new exports? It's exactly that. They are designing their own chips. They have geared up a set of students and professors, industry, and semiconductor companies to build this infrastructure. What about the software? They are not going to download software from around the world. They are designing teams to build the software. Are they preparing to export this system? You bet. They aren't just building this in the university, they've included this company, and that company will then be able to make multiple versions of this.


What China's supercomputing push means for the U.S. - Computerworld

This article, What China's supercomputing push means for the U.S., was originally published at Computerworld.com.

Patrick Thibodeau covers cloud computing and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues forComputerworld. Follow Patrick or subscribe to His e-mail address ispthibodeau@computerworld.com.

 

[Speeder 2]

My 2 cents, not an expert on semicon though:

Simply due to population size, Samsung of S Korea just can’t compete with the leading firms from the US, China, the EU and Japan in the long run.

Intel, or other world leading US high tech firms in general, enjoys a decisive systematic advantage over SMIC and most other top tech firms of China, namely the world’s largest and the most complete cross-discipline Value Chain . This makes it very hard for China to compete with at the top end.

By "value chain" I specifically mean the broad sense (in contrast to usual narrow sense industrial value chain) individual-centred innovation culture + well-funded R&D integrated into complete industrial value chain + supplemented by the relatively efficient (and the most powerful) financial machenism particularly WS investment banking and VC.

Under such a system, an innovative individual is proactively encouraged culturally and financially to come up with fresh ideas. And these ideas (not neccesarily even world-leading some times compared to their potential competitors in the rest of the world, e.g. Facebook, or Microsoft ), could be more easily discovered,nurished, and well-financed immediately by either locally-based VC or universities, before being recommended, assisted and adopted by local industry leaders and eventually propagated throughout the rest of the world being the next gen gold standard by both the local world-class industries and universities, valued and supported in int’l capital market by the most powerful financial force – WallStreet.

China currently is no match for this "killer app", if its current financial sector ( particularly investment banking and VC), deep and systematic integration of local universities & industries, and its party-dominated (instead of private industrialists-dominated) large companies are not up to the same, or even better, standard of efficiency.

That’s why we see most of ground-breaking innovations which eventually lead the world next gen industrial standards come from the West, particularly the US.

This then leads to the popular myth that “Westerners can innovate, and the Chinese lack genes of innovation but just copy”. It is not gene, but more the aforementioned system behind the scene that makes or breaks, let alone the fact the many who are mainly responsible for so-called “westerners innovations” are in fact “the Chinese” who happen to live in the West.

So on the topic, even though Huawei and ZTE show that it can be done to some extent in one area (i.e. telecom), without deep and thorough re-structuring of Chinese party-owned large industries and universities to become more “Huawei-alike” at least, China (e.g. SMIC etc) is unlikely to match, let alone surpass, most other key industrial sector leaders of the US, such as what Intel and ARM do in semicon, in the foreseeable future I am afraid, simply because the US is bound to constantly generate the next “Steven Jobs” systematically, while the relatively inefficient Chinese system is bound to bury, or at least drag the legs of, the next “Chinese Steven Jobs” systematically .

In order to compete with the US on key tech, China must change.