China First Homegrown 28 nm Lithography Tool to Be Delivered This Year

However, it remains uncertain whether SMEE can produce these machines in large quantities, as they still partially rely on foreign equipment.

Introduction:

The global semiconductor industry has witnessed significant developments and challenges in recent years, with China striving to achieve self-sufficiency in chip manufacturing with new example being 28 nm Lithography.

The story of Shanghai Micro Electronics Equipment (SMEE) and its proprietary SSA/800-10W lithography machine is a testament to the complexities and implications of this pursuit.

In this blog post, we will explore the journey of China’s semiconductor industry, the impact of foreign restrictions, and the potential opportunities that lie ahead.

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China Semiconductor Ambitions of 28 nm Lithography :

In 2020, China set ambitious goals to manufacture 28nm and 20nm chips independently, without US technology and equipment.

Shanghai Micro Electronic Equipment (SMEE) played a vital role in this effort, advancing ultraviolet-based lithographic technology.

The aim was to lessen dependence on foreign semiconductor equipment, including firms like ASML Holding NV and Tokyo Electron Ltd.

Read More: ASML to Install 600 DUV Machines by 2025 in China

Foreign Restrictions and Their Implications:

Unfortunately, China’s progress faced roadblocks when the US, Japan, and the Netherlands imposed restrictions on the sale of advanced wafer fab equipment to Chinese companies.

These restrictions were seen as a strategic alignment with the US-led “Chip-4 Alliance” aimed at curbing China’s semiconductor industry.

The restrictions on advanced semiconductor equipment hindered Chinese state-owned firms and chipmakers like Semiconductor Manufacturing International Corp. and Hua Hong Semiconductor Ltd. They continued to rely on foreign-made equipment.

The question arose: Would these restrictions contain China’s semiconductor ambitions or inadvertently fuel its drive for self-sufficiency?

Read More: 10-15% Sales Hit For ASML in China Amidst US Ban

China Rapid Progress in Domestic Lithography Machines (Upto 28 nm)

As per a report in the Securities Daily, Shanghai Micro Electronics Equipment (SMEE), a major Chinese lithography gear manufacturer blacklisted by the US, is working on delivering its first 28nm-based system later this year.

The initial domestically produced SSA/800-10W lithography machine from SMEE is expected to hit the market by the end of 2023.

There’s uncertainty about SMEE’s ability to produce these machines in large quantities, given their partial reliance on foreign equipment.

Japan recently implemented new export controls for chipmaking equipment, including lithography machines, among other items. These measures likely target China, which has been the largest importer of chipmaking equipment since 2020. This also accounts for nearly 40% of Japanese chipmaking equipment exports in 2021.

This development has the potential to increase chip production capacity, decrease foreign supplier dependence, and position China as a key player in the microelectronics industry.

Shanghai Microelectronics, China’s largest lithography machine company, is actively promoting mass production of 90nm lithography machines and advancing 28nm and 14nm lithography machines.

These machines offer cost advantages compared to ASML’s products, reducing reliance on American-controlled lithography companies and giving Chinese chip manufacturers a competitive edge.

Read More: How Huawei Could be a Winner in US Ban of Nvidia GPUs?

Disrupting the Global Chip Market

The introduction of domestically produced lithography machines in China has the potential to disrupt the global chip market.

As China improves its capabilities and achieves mass production, it can meet the growing demand for chips more effectively. This shift may lead to a reduced reliance on expensive imported machines, reshaping the competitive landscape, driving down prices, and increasing market accessibility for smaller players.

This disruption isn’t limited to pricing and accessibility; it also stimulates innovation and technological advancements globally.

Companies worldwide will strive to maintain their competitiveness in the evolving chip industry, ultimately pushing the boundaries of technological progress.

The implications of China getting legacy chips are complex and far-reaching. On the one hand, it could help to alleviate the current chip shortage, which has been disrupting a wide range of industries.

On the other hand, it could also give China a competitive advantage in some key sectors, such as artificial intelligence and machine learning.

Global Technological Competition and Self-Sufficiency

China’s progress in creating its lithography machines challenges the dominance of foreign suppliers in crucial technology sectors. By boosting domestic capabilities and decreasing dependence on external sources, China is emerging as a strong contender in the global chip industry. This intensifies the competition among key players and stimulates innovation worldwide.

Beyond the realm of technology, this shift has geopolitical implications. It reduces China’s vulnerability to trade restrictions and strengthens its self-sufficiency in critical technologies.

A strong domestic chip industry bolsters China’s economic independence and reshapes trade dynamics as it competes in chip and tech supply.

Challenges and Opportunities:

The reality is that chip production is a highly complex and interconnected process. Even the most advanced EUV lithography machines have more than 450,000 components, and no single country can produce them independently.

ASML, a leading manufacturer, accounts for just 15% of the total components in these machines.

Gina Raimondo, the US Commerce Secretary, raised concerns regarding China’s investments in older chip production capacity. She emphasized the importance of collaborating with allies to tackle this issue.

This highlights the importance of globalization and collaboration in the semiconductor industry.

Implications for the Future with China 28 nm Tool

The progress made by China in developing domestic lithography machines signifies a significant shift in the global technological landscape. It sets the stage for further advancements and competition in the future. As China continues to invest in research and development, it is expected to narrow the technological gap and potentially surpass its competitors.

The global chip industry is in the midst of a transformation, with China at the forefront. This evolution not only promises to reshape the industry but also has broader implications for global trade and economic dynamics.

Conclusion:

China’s pursuit of semiconductor self-sufficiency is a journey filled with challenges and opportunities. The restrictions imposed by foreign countries have acted as a catalyst for China to accelerate its efforts in this domain.

Editorial Team
Editorial Team
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