In a move that could reshape the global semiconductor industry, China’s Semiconductor Manufacturing International Corporation (SMIC) has reportedly pulled off 5nm chip production without using extreme ultraviolet (EUV) lithography.

Instead, SMIC achieved this using older deep ultraviolet (DUV) tools, paired with a highly complex process known as Self-Aligned Quadruple Patterning (SAQP). The breakthrough, detailed in a series of tweets by semiconductor analyst William Huo on X, isn’t just technical; it’s a bold geopolitical signal.

No EUV, No Problem

For years, the prevailing industry consensus was that EUV lithography, produced solely by Dutch company ASML, was indispensable for fabricating chips at 5nm and below. Without access to EUV systems due to export restrictions enforced by the U.S. and its allies, most analysts believed China’s chip ambitions would stall at the 7nm mark.

Instead, SMIC pushed forward using brute-force DUV techniques, squeezing every nanometer out of aging tools. According to Huo, this involved stacking multiple lithography and etching steps, specifically using SAQP, to mimic the precision of EUV. The method is slower, more error-prone, and expensive, but it works.

The result? A working 5nm-class chip, not yet in consumer devices but expected to arrive soon, potentially with the same market-shifting impact as the 7nm-based Kirin 9000S, which powered the Huawei Mate 60 and famously beat the iPhone 15 to offering satellite call support.

Frontline Fab, Not a Knockoff

The SMIC milestone also highlights China’s rapid progress in semiconductor tooling. Huo points to AMEC, now considered competitive with U.S.-based Lam Research in etching equipment, and NAURA, whose wafer cleaning tools rival those of Japan’s TEL. These firms were once seen as playing catch-up. Now they’re part of a parallel, self-reliant semiconductor supply chain.

“This isn’t just duplication,” Huo emphasized. “These are frontline fabs.” China is no longer imitating—it’s iterating on its own terms, with its own technology stack.

Sanctions Backfire, Huawei Surges

SMIC’s capabilities extend beyond smartphone chips. Huawei recently unveiled its Ascend 920 AI accelerator, reportedly manufactured on SMIC’s 6nm node. While SMIC remains cut off from EUV machines, it leveraged multi-patterning DUV lithography, possibly through its N+3 process, equivalent to 6nm, to produce this chip. The Ascend 920 delivers 900 TFLOPS of performance, a 30% to 40% jump over Huawei’s previous-gen 7nm Ascend 910C, along with 4 TB/s memory bandwidth.

Ironically, U.S. sanctions, specifically those restricting Nvidia’s H20 accelerator shipments to China, have boosted Huawei’s AI business. With Nvidia chips locked behind a strict export license system, many Chinese firms have turned to Huawei’s domestically produced alternatives, which require no such hurdles.

The very policy designed to kneecap Huawei has instead fueled its growth in the domestic AI market. SMIC’s advanced DUV nodes are the silent engine powering this shift.

The Road Ahead: 3nm with DUV?

Every chip SMIC ships under sanctions is a statement of resilience. It proves that cutting China off from EUV didn’t stop progress, it redirected it. While DUV-based 5nm chips may not match the raw performance of TSMC or Samsung’s latest EUV-made nodes, they’re already “good enough” for most modern workloads, including AI, 5G, and high-performance consumer electronics.

There are already whispers that SMIC is experimenting with an even more extreme technique, Self-Aligned Octuple Patterning (SAOP), to push DUV down to 3nm territory. It sounds improbable, but in a world where elegance is increasingly a luxury, China is betting on sheer execution.

If successful, it could permanently redefine assumptions around lithography, tool dependencies, and the geopolitical control of chip supply chains.

Moore’s Law, Rewritten

“Moore’s Law didn’t die,” Huo wrote. “It moved to Shanghai.” Instead of giving up, China is grinding its way forward, layer by layer, pixel by pixel. The future of chips may no longer be written by who holds the best tools, but by who refuses to stop building.

The rules are changing. And DUV just lit the fuse.

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China’s semiconductor foundry leader SMIC has released its financial report for the second quarter of the year today. According to the report, the company has achieved a sales revenue of US$1.9013 billion (equivalent to RMB 13.635 billion). This is reportedly a month-on-month increase of 8.6% and a year-on-year increase of 21.8%.

The company’s gross profit margin in the second quarter was 13.9%; net profit in the second quarter was US$164.6 million (currently approximately RMB 1.18 billion), which was estimated to be US$76.3 million, a month-on-month increase of 129.2% and a year-on-year decrease of 59.1%.

Reportedly, 36.5% of the company’s revenue in Q2 2024 came from consumer electronics, 32% from smartphones, 13.3% from PCs and tablets, 11% from Internet and wearables, and 8.1% from industry and automobiles. From a regional perspective, 80.3% of the company’s second-quarter revenue came from China alone. In comparison, only 16% of it came from the US and only 3.7% came from Eurasia. Notably, the second quarter sales revenue and gross profit margin were better than expected.

In terms of wafer size, 12-inch wafers accounted for 73.6% of SMIC’s revenue in the second quarter, while 8-inch wafers accounted for 26.4% of its revenue. The company’s monthly production capacity increased from 814,500 8-inch equivalent wafers in Q1 2024 to 837,000 8-inch equivalent wafers in Q2 2024.

SMIC’s capacity utilization rate continued to increase to 85.2% in Q2 this year. It sold 2.11188 million 8-inch equivalent wafers In the period, which is a month-on-month increase of 17.7% and a year-on-year increase of 50.5%. The company’s capital expenditure in Q2 was US$2.2515 billion, slightly higher than US$2.2354, which was the capital expenditure in Q1.

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Chinese chipmaker Semiconductor Manufacturing International Corporation (SMIC) has secured the number three position in the global foundry market, based on sales figures for the first quarter of 2024. The achievement comes despite ongoing trade restrictions imposed by the US government.

According to a report by tech research firm Counterpoint, SMIC captured 6% of global chip foundry revenue in Q1. That places them behind industry leader Taiwan Semiconductor Manufacturing Company (TSMC) with a dominant 62% market share, and South Korea’s Samsung Electronics at 13%.

SMIC’s growth can be attributed to its strategic shift towards focusing on its domestic client base like Huawei. The company’s financial results show that for the first quarter, 82% of its $1.75 billion revenue came from mainland clients. That’s a steady rise compared to 75.5% in Q1 2023 and 80% in Q4 2023.

The growth for SMIC isn’t without any hurdles. A teardown of Huawei’s Mate 60 Pro 5G smartphone last year revealed that the phone has an advanced Kirin 9000s processor allegedly manufactured by SMIC. 

It sparked concerns in Washington, prompting calls for an investigation into how such a chip could be produced in China given existing US restrictions. 

Both SMIC and Huawei have remained tight-lipped on the matter, while the processor itself became a symbol of China’s defiance against US sanctions on social media.

The broader foundry market, as reported by Counterpoint, experienced a 5% decline in revenue for Q1. This slowdown is attributed to a sluggish recovery in demand for non-AI semiconductors used in smartphones, IoT devices, and automotive applications.

On the other hand, the demand for AI chips continues to surge. Counterpoint analyst Adam Chang highlights a rise in capital expenditure by cloud service providers and enterprises, further solidifying the trend. This robust demand for AI chips is expected to extend through 2025, contrasting with the sluggishness in other sectors.

Nvidia, a leading player in the AI chip market, exemplifies this trend. Their latest financial report reveals a staggering 400% increase in revenue from the sale of graphics processing units (GPUs) to data centers in the quarter ending April 28th, 2024.

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(Via)

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SMIC has been a key manufacturer for Huawei‘s Kirin chips such as the Kirin 9000S and 9010. Both these SoCs are manufactured on a 7nm process while the foundry is said to be developing its own 5nm chip production process. 

New reports from Business Korea and Hankyung now suggests that SMIC has successfully achieved this milestone. That means, their 5nm process is now ready for chip manufacturing. 

That’s an incredible feat, especially given the infrastructure challenges SMIC has encountered due to US export restrictions. But the reports suggest that the SMIC’s new 5nm node relies on older Deep Ultraviolet (DUV) lithography instead of the more advanced Extreme Ultraviolet (EUV) technology. 

DUV lithography uses deep ultraviolet light with a wavelength of around 193nm to etch circuit patterns onto silicon wafers. 

EUV lithography, on the other hand, uses much shorter extreme ultraviolet light (around 13.5nm). This shorter wavelength allows for the creation of finer features, enabling the production of more powerful and efficient chips. As a result, EUV is considered essential for achieving the most advanced chip designs.

The reason behind SMIC’s inability to adopt EUV technology lies in the ongoing tensions between the US and China. ASML, a key supplier of EUV lithography machines, is restricted by US export rules from supplying its technology to Chinese foundries like SMIC. Consequently, SMIC has to rely on DUV lithography for its 5nm node.

Despite yield concerns, Huawei is likely to use processors manufactured using SMIC’s new 5nm node on its upcoming Mate 70 series.

Additionally, there’s a rumor of a new Huawei laptop with a Kirin chip for PCs that is said to rival Apple’s M2 in terms of performance. Whether these rumors hold weight remains to be seen.

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(Via: Business Korea, Hankyung)

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SMIC, one of China’s leading semiconductor manufacturers, faces a mixed bag in its financial performance for the year 2023 and the beginning of 2024. Despite challenges, including weak global demand and intense competition, the company remains a key player in the semiconductor industry.

In 2023, SMIC experienced a decline in revenue, dropping from $7.27 billion in 2022 to $6.32 billion, marking a significant decrease. Net income followed suit, plummeting by 50.4% to $902.5 million compared to the previous year. Factors contributing to this slump include weak global market demand, high industry inventory levels, and fierce competition within the semiconductor sector.

However, there were glimmers of hope in the fourth quarter of 2023. SMIC witnessed a 3.5% increase in revenue year-on-year, reaching $1.68 billion. This uptick was attributed to strong demand for Huawei Technologies’ Mate 60 series 5G smartphones, which utilized processors manufactured by SMIC. Despite this positive development, SMIC’s quarterly net profit declined by 55% compared to the previous quarter, falling to $174.68 million.

Looking ahead to 2024, SMIC’s outlook remains cautious. The company expects its revenue growth to align with the industry average, with no significant rebound anticipated. Factors influencing this outlook include the gradual improvement in client inventory levels and the rising demand for smartphones and internet services. However, SMIC remains wary of potential challenges, including uncertainties in the global economic landscape.

Regionally, China continues to dominate SMIC’s revenue distribution, accounting for 80.8% of total revenue in the fourth quarter of 2023. Despite this, there was a slight decrease from the previous quarter, with revenue from the US increasing to 15.7% of the total.

Revenue breakdown by applications reveals that smartphones, computers, and tablets remain the largest revenue sources for SMIC, comprising 60.8% of total revenue in the fourth quarter. However, the consumer electronics segment experienced a slight decline in revenue, reflecting slow demand in this sector.

Despite challenges, SMIC’s involvement with Huawei in developing advanced chips for the Mate 60 series highlights the company’s technological prowess and its ability to secure significant partnerships in the industry. However, SMIC’s cautious approach to recovery reflects the ongoing uncertainties in the semiconductor market.

SMIC’s financial performance in 2023 reflects both challenges and opportunities in the semiconductor industry. While the company faces headwinds such as weak global demand and intense competition, it remains resilient and poised to capitalize on emerging opportunities in the market.

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(via)

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Huawei‘s smartphone sales saw a significant boost last year, largely due to the popularity of the Mate 60 series featuring their Kirin 9000S chip. 

Although the 9000S, built on a 7nm process, isn’t the top-performing smartphone SoC, its in-house development is a notable achievement for Huawei. 

However, the company is now in need of a more powerful and efficient chip for its upcoming smartphone models.

A report by Financial Times now suggests that Huawei is now aiming for 5nm chip production. Its partner, SMIC, which is China’s largest chipmaker, has set up a new semiconductor line in Shanghai specifically for making chips designed by Huawei.

The move comes as the Biden administration has imposed stricter export restrictions on advanced chipmaking equipment citing national security concerns. 

Additionally, the US government is also working with the Netherlands, and Japan to make it harder for China to access cutting-edge chip manufacturing equipment. 

For now, SMIC is said to be repurposing its existing DUV equipment for 5nm chip production. However, this approach might lead to lower yields and higher costs of SoCs. 

Moreover, while Huawei’s 5nm chip will certainly not be able to compete with flagship chipsets from Qualcomm or MediaTek, it’s important to take into account that China’s semiconductor industry is still making progress despite the US ban. 

So manufacturing a 5nm chip without relying on foreign support would be a big achievement for both Huawei and SMIC.

An insider familiar with the plans told the Financial Times, “With the new 5nm node, Huawei is well on track to upgrade its new flagship handset and data center chips.”

Huawei is rumored to using the upcoming Kirin SoC in the P70 series of smartphones. Besides this, the company is actively working on Harmony OS NEXT, a new generation operating system built on Huawei’s proprietary kernel. The OS will also ditch Android app support completely. 

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A new report from Nikkei says Chinese chipmaker SMIC is developing 3nm fabrication processes despite key equipment difficulties occasioned by US sanctions. The chipmaker has been prevented from accessing advanced chip production equipment from US vend

SMIC is reported to have developed its 2nd-gen 7nm-class process technology that can be used to produce smartphone processors. The new report states that SMIC is pursuing research on 5nm and 3nm-class process technologies. The research is being carried out in-house by the company’s research and development team. The team is led by co-CEO Liang Mong-Song, a renowned semiconductor scientist. The team leader has had stints at TSMC and Samsung. He is rated as one of the most brilliant minds in the semiconductor industry.

The news is quite instructive that the US sanctions regime has not been able to completely halt the progress of SMC in developing advanced chips beyond the 7nm process. It may have seriously slowed down the company, but a combination of factors is working in its favor in overcoming the challenges.

SMIC is currently the fifth-largest contract maker of chips in the industry. It lost access to leading-edge wafer fab tools that severely limited its ability to adopt new process technologies. As a result of the sanctions, SMIC was unable to get extreme ultraviolet (EUV) lithography tools from ASML. It however relied solely on deep ultraviolet (DUV) lithography for its 2nd-gen 7nm-class node.

The ASML Twinscan NXT:2000i lithography machines are the best tools available to SMIC currently. They can etch up to 38nm production resolutions. The level of precision is adequate for printing 38nm metal pitches using double patterning for 7nm-class nodes. Metal pitches shrink to 30-32nm at 5nm and 21-24nm at 3nm, according to AML and IMEC.

Multi-patterning is another option for achieving ultra-small feature sizes that can omit the use of EUV. It is a complicated process that lengthens the cycle times and can affect yields, as well as wear down the fabrication equipment. The cost implications for multi-patterning is also quite high. SMIC is using triple, quadruple, or sometimes, quintuple patterning to achieve lower resolutions. The design of a DUV-only 3nm-class fabrication process is a significant milestone for SMIC. It remains to be seen how the chip will perform in products.

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Despite crippling US sanctions, Chinese tech giant Huawei has released a new 5nm chip, the Kirin 9006C SoC.  This development comes just months after Huawei unveiled its 7nm Kirin 9000S chip, used in the latest Mate 60 series smartphones.

US sanctions have severely impacted China’s tech sector, particularly homegrown brands like Huawei, which were heavily dependent on American technology. These sanctions restrict access to crucial semiconductors and silicons from American giants like Qualcomm, impacting every China-based firm.

However, earlier this year, Huawei achieved a breakthrough with their 7nm ARM processor, the Kirin 9000S. The processor was manufactured by SMIC (Semiconductor Manufacturing International Corporation) and powers the Huawei Mate 60, which smashed sales records in China.

While the Kirin 9000S doesn’t quite match the latest offerings from Qualcomm or MediaTek, it’s a far more advanced design than anyone expected SMIC to produce with its current hardware capabilities.

Huawei’s new 5nm chip: Kirin 9006C

This wasn’t just a one-off feat. The Kirin 9000S marked the beginning of a series of chips designed to defy the sanctions. Now, Huawei is pushing the boundaries even further with the release of the Kirin 9006C SoC.

The new processor boasts eight ARM CPU cores (four A77 and four A55) with a maximum clock speed of 3.13GHz. While the specs may not seem groundbreaking, the real highlight is its 5nm process node technology, which is a milestone achieved by Huawei despite US sanctions. The Kirin 9006C is expected to be manufactured by SMIC, just like the Kirin 9000S.

Currently, the Kirin 9006C can only be found in Huawei’s Qingyun L540 laptop. However, its potential extends far beyond. Rumors suggest that Huawei will be incorporating this powerful new 5nm Kirin chip in their upcoming P70 smartphone series, expected to be announced early next year.

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China’s Semiconductor Manufacturing International Corporation (SMIC) has reportedly placed substantial orders for raw materials, equivalent to around two years’ worth of supply, with Taiwanese partners. This move follows the recent shipment of Huawei’s HiSilicon Kirin 9000S system-on-chip for the Mate 60 smartphone, a move that could potentially violate U.S. sanctions.

The motive behind SMIC’s significant stockpiling efforts has sparked speculation within the tech world. While some experts suggest it is a proactive measure against anticipated stricter sanctions from the U.S., others argue that SMIC might be gearing up to meet the soaring demands of Huawei, its major client. Huawei hopes to ship up to 20 million units this year, with projections indicating sustained sales well into the next year.

The U.S. sanctions on Huawei disrupted its chip supplies, forcing the company to explore alternative solutions. Enter SMIC, which, until recently, lagged behind global competitors. However, the launch of the Huawei Mate 60 Pro, featuring the 7nm 5G-enabled Kirin 9000S chipset, marked a significant leap forward for both companies. This advance not only enabled 5G services in the U.S. but also showcased SMIC’s prowess in the highly efficient 7nm node process.

SMIC’s move to secure a robust raw material inventory can be seen as a dual-purpose strategy. On one front, it acts as a buffer against potential U.S. restrictions, ensuring that the company can continue its operations seamlessly. On the other hand, this stockpiling effort positions SMIC to meet Huawei’s escalating demands. Industry analysts suggest that this forward-thinking approach aligns with SMIC’s efforts to assist Huawei in becoming a dominant force in the smartphone market once again.

SMIC’s approach mirrors that of several Chinese chipmakers, who have been aggressively stockpiling chip-making equipment from various international sources, anticipating potential disruptions due to geopolitical tensions. This proactive stance highlights the industry’s resilience and adaptability in the face of challenging global scenarios.

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(via)

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Huawei’s smartphone adventure is undoubtedly one of the saddest stories of all time. Not too long ago, the company that was vying for market leadership has lost most of its users to competitors in every country outside of China. The main reason for this is the embargo imposed by the United States. Since 2019, Huawei has been banned from working with all US companies, including Google services.

Although the company still produces great phones like the Mate 60 and manages to attract the attention of users. However, all of this could soon get much worse. A US lawmaker is calling for the US Commerce Department to end all technology exports to Huawei and China’s top semiconductor firm SMIC. Here are the details…

Huawei and SMIC at Risk of Losing Access to US Tech

A US lawmaker is calling for the US government to stop exporting technology to Huawei and SMIC, following the discovery of new chips in Huawei Mate 60 that may violate trade restrictions. Representative Michael Gallagher, chair of the House of Representatives’ committee on China, said in a statement that the new chips “likely could not be produced without US technology” and that SMIC may have violated the Department of Commerce’s Foreign Direct Product Rule. He says that this is a threat to national security.

Gallagher’s proposal is likely to face opposition from some businesses, who say that it would hurt the US economy. But he argues that it is necessary to protect national security. As we mention above, Huawei has been under US sanctions since 2019, when the Trump administration added the company to a trade blacklist over national security concerns.

The sanctions have made it difficult for Huawei to obtain the components it needs to make its products. But, Gallagher says that these sanctions have not been enough. He wants to completely cut off the two companies from US technology. It is unclear whether the US government will heed Gallagher’s call. But his proposal is a sign of the growing tensions between the US and China over technology.

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(via)

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Huawei launched its flagship Mate 60 series of smartphones in August. Now a new report has revealed some interesting details regarding the Mate 60 Pro‘s 5G SoC, Kirin 9000S. So let’s take a look.

Huawei Mate 60 Pro features one of China’s most advanced chips

According to a new report from TechInsights, the Chinese tech giant’s Mate 60 Pro features a chip designed by SMIC. For those unaware, SMIC is a major semiconductor manufacturer in China, which marks a major shift away from Huawei’s previous supplier, TSMC. Huawei was cut off from its primary chip supplier and lost access to advanced chip production for its proprietary HiSilicon Kirin series of mobile processors.

But now, Huawei smartphones supports 5G connectivity again and will feature China’s most advanced mobile processor. TechInsights adds that the Huawei Mate 60 Pro in their lab features the latest generation process called N+2 7nm, which marks a major upgrade in Chinese semiconductor manufacturing. The Kirin 9000S has a slightly larger die size (107 mm²) compared to the older Kirin 9000 (105 mm²).

The Huawei Mate 60 Pro features the advanced 7nm-based chipset that is more advanced than SMIC’s 14nm process node. Furthermore, it features a larger critical dimension than the ones on the 5nm process. SMIC’s N+2 7nm process will also offer improved scalability and yield, which were major challenges the last time.

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Semiconductor Manufacturing International Corporation (SMIC) the largest chipmaker in China recently released its unaudited financial report for the fourth quarter of 2022. 

As per the report, SMIC revenue for 2022 crossed $7.2 billion, which is a 34% increase YoY. The gross margin increased to a record high of 38%. The company has reported an annual growth rate of more than 30% for two consecutive years, 2021 and 2022. The company said that mobile phone wafers accounted for 27% of its total wafer revenue and by the end of 2022, it was able to increase its monthly capacity for 8-inch wafers to 714 thousand units and an annual capacity utilization rate of 92%.

Despite the crushing sanctions by the US on China’s semiconductor industry and a downward economy, the company was able to create record sales in 2022. However, the management has predicted a bleak future as the semiconductor industry cycle is still at the bottom and there are too many complex external factors including the ongoing US-China tech war that can adversely affect the semiconductor industry. 

For the first quarter of 2023, the company is expecting a steady decline of 10% to 12% in revenue. The gross margin projection stands at 19% to 21% which is almost 19% lower than the previous year. Annual revenue for 2023 is expected to decline by a low-teens percentage year-over-year, and the gross margin is expected to be around 20%.

What is the Future of SMIC?

SMIC and its subsidiaries are one of the leading semiconductor foundries in the world and are the front-runners in manufacturing capability, scale, and comprehensive services in China. The company provides semiconductor foundry and technology services to global customers on 0.35 micron to FinFET process node technologies.

SMIC is currently in the expansion phase and is making continuous high investments to increase its production capacity. The company’s capital expenditure stood at $6.35 billion in 2022. By the end of the year, the company had started production in its Shenzhen plant and had entered into a pilot production phase in the the Jingcheng factory. SMIC has already completed the construction of the main fab shell at the Liangang plant and has started the construction work for the new factory at Xiqing. 

US-China Tech War: Its effects on SMIC

The mass production at SMIC Jingcheng is postponed by a couple of quarters due to a delay in getting bottleneck equipment. Though the company has not stated the reason for the delay, experts speculate that the ongoing US sanctions have made it difficult for the company to acquire important semiconductor manufacturing machines. 

In 2020, the US added SMIC and other Chinese semiconductor companies to its Entity List, which is basically a US trade blacklist. From 2020 to date, Washington is trying to desperately stop China’s advancement in the semiconductor industry as it fears that the Asian tech giant would become a global leader in fields like Artificial Intelligence, military, and quantum computing. The Biden administration, not only stopped US companies from exporting technology, equipment, personnel, and ancillary services to China’s semiconductor companies, but also roped in allies like Japan and Netherlands to boycott the Chinese chipmakers. 

China is the world’s largest semiconductor market and accounts for almost one-third of global sales. The semiconductor industry plays a vital role in the country’s technology sector and accounts for almost 30% of the GDP.  However, the country is not self-sufficient in this field, as it is heavily dependent on foreign nations for advanced technology and equipment. 

Though SMIC competes with global leaders like TSMC Taiwan and Samsung of South Korea, it is still generations behind when it comes to technology. SMIC is now working on research and development and expansion of its factories to overtake its competitors. The company has invested $197.5 million in just the fourth quarter of 2022 in research and has reported a 14.7 % YoY increase in R&D expenditure. 

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Huawei is apparently planning to build a new fab manufacturing plant in China. The new site will be built in partnership with SMIC (Semiconductor Manufacturing International Corp) and will cost tens of billions of dollars.

The news arrives from Media reports in China, which claim that the smartphone and telecommunications based giant will be setting up a new fab site in Shenzhen. For those unaware, SMIC is China’s largest wafer fab and contract chipmaker. Thus, Huawei will leverage SMIC’s expertise in semiconductor production technology along with its own chip designing capabilities. Notably, the brand also sought TSMC‘s supply chain for cooperation to help grow its semiconductor proficiency via funding.

Additionally, the report also stated (Via HuaweiCentral) that “Recently, Huawei has come to us to help build a fab in the mainland.” It further added that the company’s primary focus at the moment is to acquire an ample amount of equipment and plant resources to reach mass production levels. So, Huawei has reached out to members of the “TSMC Alliance.” This, in turn, would help accelerate setting up its fab while also shortening the time to enter mass production.

Interestingly, the company is even looking for partners to promote its semiconductor production plans. As of right now, the investment amount for this major project is still unknown, although, the company is expected to receive official support as well. For those unaware, US sanctions had cut off Huawei from its primary chip supplier TSMC, so it arrives as no surprise that the company plans to build its own chip plant.

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Chinese chipmaker, Semiconductor Manufacturing International Corp (SMIC) may have been under the searchlight of the US Defense Department and a new proposal could see the company being shut out from accessing key supplies from US producers. The Defense Department says that some current regulatory loopholes are being exploited by SMIC to buy critical United States technology that could be used for military purposes.

However, it is reported that the Defense Department’s proposal is not having a smooth ride as some US Commerce Department officials are making efforts to block the new proposal. SMIC is already holding the wrong end of the stick, as it has been previously blacklisted from accessing advanced manufacturing equipment from US suppliers on suspicion of ties to the Chinese military. SMIC continues to reject the claims that it has any links with the Chinese military.

Chinese companies have continued to endure stringent scrutiny and blacklisting due to suspicion that they may be fronts for the Chinese government or its military. More Chinese companies could be added to the US blacklist in the coming months. These blacklists are captured by the Commerce Department’s Entity List and the Treasury Department’s list banning US investment.

The blacklisting move comes amidst growing tensions between Beijing and Washington. Some of the issues are also related to alleged human rights violations in China’s Xinjiang region. An official response from SMIC is still expected at this time.

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Suppliers of Huawei and SMIC have been granted billions of dollars worth of licenses from November through April to sell these firms goods and technology despite both brands being in the trade blacklist in the US.

According to Reuters, documents released by Congress showed earlier this week that 113 export licenses worth 61 billion US Dollars were approved for suppliers to ship products to the Chinese telecom giant along with another 188 licenses that are worth nearly 42 billion US Dollars were approved for China’s major chipmaker SMIC (Semiconductor Manufacturing International Corp). The data also revealed that more than 9 out of 10 license applications were granted to SMIC suppliers, while around 69 percent of requests were granted to ship to Huawei.

The US House of Representatives Foreign Affairs committee voted to grant a request to release the licensing data that was received from the Commerce Department back in May. These numbers have led to an outcry in Washington that are against these Chinese firms receiving access to advanced US made technologies. Republican Senator Marco Rubio told Reuters that President Joe Biden needs to explain the reason behind these companies continuing to receive “waivers.”

The government official added that “It is just another example of President Biden not taking the economic and security threat posed by the Chinese Communist Party seriously.” Meanwhile top Republican member Michael McCaul said that “It’s clearly in our national interest to increase transparency and public scrutiny on how our nation transfers its technology to an adversary.”

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SMIC, China’s largest chip maker, has entered into an agreement with Shenzhen government to build a new wafer fabrication plant in the country. The news arrives as the world suffers from a major semiconductor shortage.

According to a SCMP report, the new SMIC Shenzhen plant will be using mature chip making technologies of 28nm processes and above. This plant is set to have a goal of producing 40,000 12 inch wafers per month. The announcement arrived earlier this week, with the production at the new factory expected to begin in 2022. Furthermore, the SMIC and the Shenzhen government backed investment fund will invest a total of 2.35 billion US Dollars in the plant.

The Chinese chip maker will hold a stake of 55 percent stake in the facility while the Shenzhen fund will hold a 23 percent share. As per an official statement from the company, “By seizing the opportunity in Shenzhen to develop the integrated circuit industry, the project can meet growing market and customer needs, and promote our development.” Notably, the plans to build the new plant arrives amid a global shortage of chips that has affected various industries across the world.

Additionally, the move from the chip maker and the local government is also in line with China’s efforts to become self sufficient in semiconductor technology, especially in regard with 28nm process with the next two years. This technology is positioned between the low to mid and mid to high end chips and is widely used in mature products like smart TVs and other smart gadgets as well.

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US firms like the Lam Research Corp and Applied Materials Inc are struggling to obtain an export licenses from the US government to sell chip related equipment to SMIC, China’s largest chip maker.

According to a Reuters report, the US government has been slow to approve the license for American companies, despite the ongoing global chip shortage. Furthermore, licenses for the US suppliers, which are estimated to ship equipment and materials worth 5 billion US Dollars, have yet to be granted. At the moment, it is reported that some licenses have been granted to certain firms, which included a small number of expensive equipment.

After the Chinese semiconductor based firm was banned, the US government faced multiple complaints from American companies that traded with SMIC. But as policy shifts with the arrival of a new US President, Joe Biden, it remains uncertain what direction the administration would take in dealing with Chinese firms like SMIC, which produces chips for various American brands like Qualcomm and others.

For those unaware, SMIC faced the export trade ban after the Trump administration accused the company of having ties with China’s military. It was placed on the Entity List as well, which would require US based firms to acquire a license from the government before selling equipment or materials with the blacklisted firm. The new administration has yet to make a decision on the license application, but the verdict is expected to arrive within a month, so stay tuned for more as we will be providing updates.

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SMIC, China’s largest chip maker, has apparently received a license to import matured process equipment from American firms. The news arrives amid the global chip shortage, which experts believe was further aggravated by the Trump-era regulations.

According to a GlobalTimes report, the Chinese semiconductor based firm has received license to trade with at least one US based supplier. Although, the government has yet to allow SMIC access to advanced processes like 7nm or below technology. Experts believe that the primary reason for allowing SMIC to import with America is due to the Trump administration’s sanctions disrupting supply chains and even hurting the interests of many local firms.

The report adds that the Chinese chip maker has received access to US licenses to import equipment for use in mature processes, with one US supplier already receiving the license, while two other firms are awaiting approval at the moment. Both companies are also expected to likely receive the license to trade with SMIC as well. Currently, the Chinese tech giant has access to 14nm and above processes and not the 10nm or below processes.

Xiang Ligang, an independent analyst, added that the US will probably gradually ease supply restrictions of chip equipment to China based firms, but are also likely to control the advanced technologies like 7nm or below for a while. Xiang further added that “The US government ban on Chinese semiconductor sector has not only disrupted global semiconductor supply but also hurt the interests of their own companies as well. I believe the Biden administration is moving to correct the situation.”

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Since January this year, the tech industry globally has been plagued by an unprecedented chip shortage. There are claims that the shortage was due to former President Donald Trump’s clampdown on Chinese companies, especially those in the semiconductor value chain such as SMIC.

The automobile industry has been the worse-hit by the global chip shortage so much that some companies have had to shut down their assembly lines. Apart from the automobile sector, the gaming industry is also impacted as there is presently a shortage of gaming consoles such as the Sony PlayStation5.

In order to stem this tide, Joe Biden is reportedly planning several “aggressive steps” aimed at ameliorating the global semiconductor shortage. A report carried by Bloomberg says the US president “is expected to sign an executive order directing a government-wide supply chain review for critical goods in the coming weeks, with the chip shortage a central concern behind the probe.” The new administration is said to prioritize “identifying choke points in supply chains” to ease current shortages.

Another aspect the US administration is said to be eying is the creation of fresh incentives that will lure chip manufacturers to set up their foundries in the United States. To this end, the top brass in the chip industry, including Intel and Qualcomm, have all enjoined the US government to fund such initiatives. However, w can’t say for sure the exact from that the incentives could take.

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The Semiconductor Manufacturing International Corp (SMIC) recently stated that it is facing troubles in meeting client demands. These orders are for mature technologies in plants that have been running at full capacity for several quarters now.

According to a Reuters report, the company’s CEO, Zhao Haijun, made the statement last week during a conference call after reporting its latest quarterly result. At the moment, SMIC is China’s largest chipmaker but is facing pressure due to US sanctions, which are affecting its operations that impact its revenue growth as well. In the fourth hand final quarter of last year, the company reported sales worth 981 million US Dollars, which marked a 16.9 percent rise year on year.

However, despite its notable growth during this period, the company only expects a revenue increase in the “mid to high” single digits this year. As per the CEO, “SMIC could have maintained last year’s record growth momentum,” if not for its current predicament. Zhao further added that “Although we cannot control external forces, we will cultivate new possibilities and opportunities in the face of crisis and changes.” Since it is a notable figure in China’s semiconductor market, the local government is also banking on the firm for the development and growth of the local semiconductor industry.

At the moment, the company is in talks with its suppliers and the US government, hoping to obtain licenses, which would enable it to purchase equipment to boost its production capacities. SMIC is currently aiming at expanding its capacity in its 12 inch fabrication plants by 10,000 wafers per month and by 45,000 wafers for its 8 inch fab plants. But, the company is expecting delays in its plans due to longer lead times in procuring equipment for this move.

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China’s Semiconductor Manufacturing International Corporation (SMIC) has announced its unaudited results for the last three months of the last year which ended on December 31, 2020. The fourth-quarter earnings call shows that the firm raked in US$981.1 million which is a slight drop from the US$1,082.5 million accrued in the third quarter of 2020. However, it is slightly higher than the US$839.4 million generated from sales of semiconductors in the fourth quarter of 2019.

SMIC was one of the firms affected by Donald Trump’s obnoxious ban on Chinese companies from using US technology. The ban has no doubt affected the brand’s ability to meet up with orders but SMIC is optimistic that its revenue will grow in Q1 2021 by 7% to 9% QoQ. Also, the chipmaker expects gross margin to range from 17% to 19%.

Gross profit in the fourth quarter of 2020 was US$176.8 million, compared with US$262.0 million in the third quarter of 2020 and US$199.4 million in the fourth quarter of 2019.

The gross profit margin in the fourth quarter of 2020 was 18.0%, compared with 24.2% in the third quarter of 2020 and 23.8% in the fourth quarter of 2019.

Dr. Gao Yonggang, Chief Financial Officer of SMIC commented:

“The Company’s revenue in the fourth quarter of 2020 was US$981 million, and gross margin was 18.0%. Multiple full-year financial metrics for the Company (unaudited) hit record highs. Annual revenue was US$3,907 million, a growth of 25.4%; gross profit was US$921 million, a growth of 43.3%; profit attributable to the company was US$716 million, an increase of 204.9%; and EBITDA was US$2,123 million, a growth of 54.6%.

Looking to 2021, as SMIC was placed on the US Entity List, the Company is restricted from procuring related US items or technologies; so, there are risks and uncertainties to our annual forecasts. The forecast we give today assumes that operational continuity is not significantly adversely affected. Export license application processes must be followed, they take time and will face uncertainty. Based on the above, our targets and plan for 2021 are as follows: our annual revenue target is mid-to-high single-digit percentage growth; revenue target for 1st half is around $2.1 billion, and annual gross margin target is in the mid-teens range.”

Dr. Haijun Zhao and Dr. Liang Mong Song, Co-CEOs of SMIC commented:

“At present, the foundry industry capacity is tight, the demand for non-FinFET processes remains strong, and our capacity for non-FinFET will continue to be fully loaded. In order to meet customer needs, the Company expects capital expenditures this year to be US$4.3 billion, in which the majority is for non-FinFET capacity expansion and the remaining for FinFET, the infrastructure of the new Beijing joint-venture project, and etc. In terms of capacity expansion, we increase monthly non-FinFET capacity by 10,000 for 12-inch, and not less than 45,000 for 8-inch this year. Given the impact of being added to the Entity List, we will consider strengthening the development and deployment of our first and second-generation FinFET multi-platforms and expand the reliability and competitiveness of our platforms.”

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Information released by China’s Ministry of Industry and Information Technology (MIIT) reveals that 90 indigenous companies have filed a joint application for the establishment of the National Integrated Circuit Standardization Technical Committee with its proposed secretariat at the China Electronics Standardization Institute.

China’s semiconductor is one of the weak links in electronics manufacture. The recent ban on Huawei and ZTE from accessing US technology exposed the vulnerability of the local chip market. Even semiconductor companies like SMIC that were making effort to fill the void created by the ban were prevented from accessing US technology. Also, most of the foundries are either small-scale or weak in technology so they need to cooperate in groups.

The purpose behind the creation of the committee is to coordinate weak industries and the promotion of integrated circuit standardization work and strengthen the standardization team building.

The 90 Chinese firms that are part of this consortium include Huawei, HiSilicon, Xiaomi, Datang Semiconductor, Unichip Microelectronics, Zhanrui Communication, ZTE Microelectronics, SMIC, Datang Mobile, China Mobile, China Unicom, ZTE, Tencent, and more.

According to the application, the committee will focus on the research and formulation of the following standards:

• Improve the relevant standards for the assessment of integrated circuit products, including conducting research on the assessment requirements of integrated circuit bare chips and organizing the formulation of relevant standards.
• Track the development of emerging packaging technologies, focusing on the standardization of high-density FC-BGA packaging, wafer-level 3D rewiring packaging, through silicon via (TSV) packaging, SiP radio frequency packaging, packaging and ultra-thin chip 3D stacked packaging technologies , And solidify the results into the assessment procedures and requirements for flip-chip bonding, chip-scale packaging (CSP), wafer-level packaging (WLP), and system-in-package (SiP).
• Conduct research and standard formulation in response to the performance, reliability and information security requirements of integrated circuit products in emerging applications. For example, for mobile Internet, cloud computing, Internet of Things, big data, etc., for key integrated circuits with a large amount of supporting and a wide range of applications, such as microprocessors, memories, field programmable circuits, custom circuits, system-level circuits (SoC and Related IP cores), etc., carry out corresponding standard research and formulation work.
• Carry out parameter index system and quality assurance element research, formulate blank detailed specifications, so as to provide a basis for the preparation of detailed specifications for integrated circuit products, and ensure that product parameter indicators can fully meet the performance requirements, reliability requirements and information security of integrated circuits in the above application fields Guarantee requirements.
• Improve the standard system of testing methods, mechanical and environmental testing methods to ensure that the testing and testing of various parameter indicators have standards to be followed.

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Semiconductor Manufacturing International Corp., known as SMIC, was recently put on Entity List or U.S. export control blacklist. Now, the company has said that the move will hamper the development of its cutting-edge technologies.

The company has released a statement after doing an initial assessment and said that “the U.S. move will badly affect the company’s Research & Development and the production capacity construction of advanced technologies of 10 nanometers and below.” It added that there’s no significant impact on the operation and finances in the short-term as the company isn’t mass-producing the chips using the 10nm technology.

SMIC getting banned by the United States is a major blow for the Chinese government which is working towards making the country self-sufficient when it comes to manufacturing semiconductors and the company is leading the campaign.

From the development, it appears that the United States is determined to thwart every effort of China or Chinese companies to procure components for advanced technologies. To provide components to the companies in the Entity List, the U.S.-based firms will have to apply for a special license.

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This is similar to the situation Huawei is facing right now, which was put on Entity List by the Trump administration in its ongoing US-China trade war. While the Executive Order from Trump cited national security risk, no evidence to back that claim has been produced. Huawei has time and again denied any such allegations against the company.

SMIC has said that the company will continue to cooperate with relevant U.S. government bodies and will be taking all feasible measures to minimize adverse effects and work out a solution to continue its development.

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China’s top chipmaker SMIC was already having a rough week following the reported resignation of its CEO. Now its problems are getting much worse. The US government has slammed stricter restrictions on China’s top chipmaker, Semiconductor Manufacturing International Corporation (SMIC) in what looks to be the final moves of Donald Trump”s administration which had been very hard on Chinese interests.

The United States Commerce Department announced on Friday (via) that dozens of Chinese companies, including SMIC, would be added to its Entity List that effectively prevents them from accessing US suppliers and technology.

The decision, according to Commerce Secretary, Wilbur Ross, is to protect American interests by preventing advanced US technology that could be deployed to help build the military of its adversary. SMIC was branded as a perfect illustration of the risks of China using US technology to advance its military capabilities.

SMIC insists that it has no links with the Chinese military and this restriction is bound to create serious problems for the company, which relies heavily on American software, hardware, and other equipment for the complete design and manufacture of its semiconductors. The economic implications are dire for the chipmaker, as sales and growth forecasts have to be reviewed downwards.

US suppliers to SMIC are now bound to apply for a license to sell unique and critical components needed to produce semiconductors at advanced technology nodes — 10 nanometers or below and is aimed at denying such key enabling technology from promoting the Chinese military in any way.

This announcement comes as additional problems for the company, as it was reported this week that its co-CEO Liang Mong Song is stepping down from his position.
SMIC is yet to put out a statement on these issues.

A spokesperson for China’s Ministry of Foreign Affairs, in response to the new restrictions, has accused the US government of using state power to suppress Chinese companies and China will continue to take necessary measures to safeguard the legitimate rights and interests of these companies.

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The US is apparently planning on adding various Chinese companies to its trade blacklist today (18th December 2020). This would also include China’s largest chipmaker SMIC, as per two sources close to the matter.

According to a Reuters report, the move is the latest from the Trump administration’s efforts against China. Notably, it arrives just a few weeks before the Democratic President Elect Joe Biden takes the office, on January 20. As per the sources, the US government is aiming to add around 80 additional companies and affiliates to the ‘Entity List,’ which mostly comprises of China based firms.

Furthermore, the US Department of Commerce is also expected to designate some of these Chinese companies as allegedly having ties to China’s military, or are aiding in the construction and militarization of artificial islands in the South China Sea. Some of the companies even have allegedly been involved in human rights violations, as per the source. At the moment, the Trump administration has added more than 275 China based companies and their affiliates to the Entity List to target key Chinese industries.

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This most notably includes Huawei Technologies and ZTE, two major consumer electronics and telecommunications equipment providers. Now, even SMIC is reportedly the latest target for Washington, as the Commerce Department previously mandating suppliers to the company to apply for export licenses after stating that there was an “unacceptable risk” with its equipment being possibly used for military purposes.

Unfortunately, SMIC, the Commerce Department, or even the Chinese Embassy in Washington has yet to respond to this report. Similar to other Chinese firms, SMIC has denied the accusations of ties to China’s military. If the chipmaker is put on the Entity List, the company would be forced to seek a special license from the Commerce Department before being supplied with key components or materials from US based firms.

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SK Hynix is beginning operations from its foundry factory in China. The South Korean chipmaker held a factory production ceremony earlier this week and is now starting operations from the Chinese unit.

SK Hynix System IC’s factory can handle with 8 inch wafers, which is notable since Chine has numerous fabless companies, as per TheElec report. At the moment, China’s fabless market is estimated to have a value of 25.5 billion US Dollars, which is expected to more than double by next year reaching 68.6 billion US Dollars. This news also arrives after China’s largest chipmaker, SMIC, being added to the entity list by the US government, which should benefit the South Korean company.

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Back in 2018, SK Hynix entered into a joint venture with the Wuxi government and has since completed its factory in 2019. Since then, the company had been working on shifting some of its equipment at its M8 fab in its South Korea to the newly opened one in China. Other necessary equipment are expected to be transferred by the end of 2021, and will have fab produced in China while research and development will be undertaken in South Korea.

Notably, the news also arrives as SMIC shares fell after one of its top executive resigned. The surprising resignation of the co-CEO Liang Mong Song was shared via online media outlets and stated that the reason for his departure was the appointment of a vice chairman without his approval. The Chinese semiconductor based firm has since seen a drop in shares between 7.2 percent to as much as 9.8 percent lower, which is the most in a day since the past three months, as per a Fortune report.

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At an interactive platform recently, the Shanghai-based Semiconductor Manufacturing International Corp (SMIC) hinted that it has started small-scale trial production of its second-generation N+1 FinFET process. This was disclosed in response to an investor’s question about the progress the company has made in the R&D and production of 7-nanometer products.

SMIC first announced that it has achieved mass production of the most advanced 14nm process in China in 2019. The process is the company’s first-generation FinFET process and it started mass production in the fourth quarter of 2019. The company deployed the process to manufacture the Hisilicon Kirin 710A chipset which was utilized first on the Honor Play 4T and then a couple of other Huawei products.

In September this year, when asked by investors to verify internal news about the mass production of its next-generation chips, SMIC responded that its second-generation FinFET N+1 process has indeed entered the customer introduction stage. The company equally hinted that it is expected to start small-scale production (trial production) by the end of 2020.

Later in October, China’s one-stop IP and custom chip company INNOSILICON announced that it has completed the world’s first chip tape-out and testing based on SMIC’s FinFET N+1 advanced process. All IPs are made in-house, with one-time functions.

Regarding the N+1 process, SMIC CEO Liang Mengsong revealed earlier this year that the process is very similar to the 7nm process in terms of power and stability, and does not require EUV lithography. The new N+1 process nodes are being called 8nm or an early stage 7nm process. The process is geared towards low-power applications. Compared to the 14nm process, SMIC’s N+1 process has a 20% increase in performance and a 57% reduction in power consumption, while the 7nm market benchmark performance increase should be 35%.

Although this arrives as positive news, SMIC is still years behind TSMC which has moved on to the 5nm process and is presently working on its next-gen 3nm node.

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The Trump administration has confirmed that two major Chinese companies — chipset maker SMIC and oil producer CNOOC have been added to the trade blacklist, alleging them to be Chinese military companies.

The Department of Defence has designated four companies for being owned or controlled by the People’s Liberation Army. The list includes Semiconductor Manufacturing International Corp (SMIC), China National Offshore Oil Corp (CNOOC), China Construction Technology Co. Ltd, and China International Engineering Consulting Corp.

With the addition of these four companies to the trade blacklist of the United States, there are now 35 countries on the list. Companies on the list are barred from procuring or using technologies or goods made in the United States.

A couple of months ago, it was reported that the Pentagon was holding discussions to determine id the SMIC should be added to the Commerce Department Entity List. SMIC is one of the biggest players in China when it comes to chip manufacturing.

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Semiconductor Manufacturing International Corp (SMIC) heavily relies on the United States for supplies and getting blacklisted will make it a bit difficult for the company and will also hinder China’s plan to boost its chipset manufacturing technology.

However, blocking these companies from trading with US-based firms also hurts the suppliers, in this case, the US companies, as several of the companies highlighted in their request to the government to allow them to continue doing business with Huawei after the Chinese giant was added to the Entity List in May last year.

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The Trump administration is apparently planning on making another move against Chinese corporations. This time, the President seeks to add SMIC and CNOOC to its blacklist of alleged Chinese military companies.

According to a Reuters report, documents and sources have surfaced, which claim that Donald Trump is aiming to add to new companies to the blacklist over alleged ties with the Chinese government. Reportedly, the administration plans on cutting their access to US investors, which will likely raise the tensions between Beijing and Washington. This also arrives weeks before the President-elect Joe Biden takes office as the next president of the United States.

Previously, it was reported that the DOD (Department of Defense) was planning on designating four more Chinese firms as owned or controlled by the Chinese military. The new companies being added to the blacklist would bring the number of Chinese companies affected to 35 in total. For those unaware, SMIC is the top chipmaker in China while CNOOC is a known Chinese offshore oil and gas producer.

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Furthermore, a recent executive order issued by the President Trump would prevent US investors from buying securities of the listed firms starting next year. While it is unclear when the administration will add both firms to the list, documents and three sources have pointed at SMIC (Semiconductor Manufacturing International Corp) and CNOOC (China National Offshore Oil Corp) being added soon to the Federal Register.

SMIC has since stated that it will continue “to engage constructively and openly with the U.S. government,” and even refuted the allegations and saying that its products and services were solely for civilian and commercial use rather than military. It further added that it “has no relationship with the Chinese military and does not manufacture for any military end-users or end-uses.” SMIC heavily relies on equipment from US suppliers, so facing scrutiny by the Trump administration might create significant obstacles in its operations.

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In the smartphone market, the industry is ever evolving and technological breakthroughs bring about a new standard every year. Current gen smartphones already arrive with 5nm chips. However, these chips might be hard to come by for Huawei even with SMIC working on its new N+1 process nodes.

For those unaware, the Chinese tech giant lost its chip supply from its primary source, TSMC, due to US sanctions. These regulations were further reinforced, which created additional hurdles for the company, that now had a deadline to stock up on the 5nm based chips. With its flagship Mate 40 series being just around the corner, the company will be launching the new lineup with its first 5nm chipset the Kirin 9000. However, these are just from the stockpiles it had managed to obtain from TSMC before the deadline.

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Thus, the company might be able to outfit its current generation of a flagship with 5nm chips, but the same might not be said for future launches in the coming year. At the moment, a possible supplier for chips was China’s largest semiconductor based firm, SMIC. But unfortunately, the company’s most advanced solution at the time was 14nm processes. A 5nm process has about 171.3 million transistors per square mm, on the other hand, a 14nm process only has about 43 million transistors in the same space. So the higher the number of transistors, the chip is more powerful and energy efficient.

But, SMIC recently announced its new N+1 process nodes that are being called 8nm or an early stage 7nm process, as per a PhoneArena report. Currently, the process is being tested, with the manufacturing under testing to work out any issues or kinks that might occur before mass production on assembly lines. Although this arrives as positive news, it still might be too late as the new process is already a step behind what TSMC is currently offering. Meaning, by the time SMIC reaches 5nm processes, the industry would have moved onto 3nm with TSMC.

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Semiconductor Manufacturing International Corporation (SMIC), one of the largest chipset makers from China is under the radar of the US government and could face export restrictions. Now, the company has confirmed that it held preliminary exchanges with the U.S. Bureau of Industry and Security.

In its filing to the Hong Kong Stock Exchange, the company says that it is “conducting assessments on the relevant impact of such export restrictions on the company’s production and operation activities,” reports Reuters.

The company has added that it has been operating in compliance with all the relevant laws and regulations of all jurisdictions where it conducts business.

When the reports started surfacing online that the U.S. Department of Commerce has issued letters to some companies asking them to obtain a license to continue supplying goods and services to SMIC.

At that time, China-based SMIC had denied receiving any such notice from the U.S. government and had also mentioned that the company has no relationship with China’s military, which is said to be the reason behind such scrutiny.

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The restrictions or the requirement of a license to conduct business with SMIC is similar to what the United States government has imposed on Huawei, the world’s leading telecom equipment manufacturer, making it very difficult for the Chinese company to maintain its business and operations.

SMIC, which is the largest foundry in China, heavily relies on equipment from the United States as well as US-allied countries for manufacturing chips. Getting restricted could severely impact the company’s ability to conduct business.

Although SMIC is the leading chipset manufacturer in China, the company lags behind in terms of technology compared to its rivals — TSMC and Samsung. However, it recently raised around $6.6 billion through STAR Market for advanced technology. It is also working on reducing its reliance on other countries and has recently purchased a used lithography system from SK Hynix for $11.02 million.

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The US has imposed another ban on another Chinese firm. This time the export restrictions have targetted Semiconductor Manufacturing International Corp (SMIC), China’s largest semiconductor foundry based company.

According to a Bloomberg report, the recent ban will deal another blow to China’s technology industry and are indicative of the rising friction over intellectual property and national security claims. Similar to the situation Huawei is in, US based firms will now require a license to export certain products to Chinese chipmaker. Apparently, the reason for the recent sanction is due to an “unacceptable risk,” as these products might be used for military purposes.

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The risk of military use was reported by the Financial Times, which cited a letter from the US Commerce Department that was sent to the company. In an email statement, SMIC said that it had yet to receive any official notice of the sanctions and has no relations with the Chinese armed forces. It further added that it does not manufacture any military grade goods or products.

The new regulations imposed on SMIC marks the rise in trade tensions between the US and China. In recent times, the political frictions between the two superpowers have led to various clashes, with the Coronavirus pandemic only making matters worse. The Trump Administration has already reinforced various restrictions against Huawei, although, SMIC has yet to face a similar degree of treatment. However, that might soon change as the US might be planning on taking further actions and adding the semiconductor giant to the “Entity List” as well.

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A new report has revealed that Qualcomm is looking into an alternative to shift its orders from SMIC. The move might be taken considering that China’s Semiconductor Manufacturing International may soon face restrictions from the US Government.

According to a DigiTimes report, Qualcomm executives have paid a visit to Taiwan based foundries to secure capacity support. These are to act as a cushion in case the orders from SMIC falls short due to further US pressures. At the moment, Qualcomm is one of the top 3 customers of SMIC and accounts for about 13 percent of the foundry’s total wafer revenue.

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The American based chip designer has also contracted the Chinese semiconductor based firm to fabricate power management chips using its 0.18-micron process technology along with mobile application processors and SoCs using the 28nm and 14nm processes. Among the Taiwan based foundries, TSMC, United Microelectronics (UMC), and Vanguard International Semiconductor (VIS) have been approached by the Qualcomm executives for the potential orders shift, according to industry sources.

Notably, SMIC had also recently issued a statement regarding the situation and accusations from the US. The company stated that “any assumptions of the company’s ties with the Chinese military are untrue statements and false accusations.” This arrives after the Trump Administration considered adding SMIC into the “Entity List” blacklist as well.

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Semiconductor Manufacturing International Corp (SMIC), one of the largest chipset manufacturer in China, has applied for a license from the United States to continue doing business with Huawei, reports Reuters.

SMIC confirmed to Beijing News that it is applying for a license in the U.S. to continue supplying chipsets to Huawei. Further, the company also said that it will abide by laws and regulations in all countries and regions.

The development comes just days after it was reported that the United States is planning to ban China’s largest semiconductor manufacturer, which relies on American chipmaking equipment for its business.

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Tech veterans in China are planning on launching a “domestic replacement” fund in the country by the end of this year. The move arrives after the recent US sanctions and aims at supporting Chinese companies that have been affected by the Trump administration.

China Europe Capital, a venture capital firm, has raised over 5 billion Yuan (roughly 731 million US Dollars) for the fund and will start investing in startups specializing in technologies. In other words, the new fund is aimed at creating China’s next tech giant. The veterans include former executives from major Chinese companies like Huawei and SMIC, with a focus on 5G networking and artificial intelligence.

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Notably, the new fund is being created amid a government backed investment boom in the China’s local technology sector. The “tech war” between Washington and Beijing has fueled the investments. In recent times, the relationship between the US and China has soured, with the coronavirus pandemic making matters worse. According to a Reuters report, “China and the US are in a Great Power rivalry that will end only when there’s a knockout,” said Zhang (fund’s Chairman and former Huawei Vice President).

This also arrives after reports have surfaced that the Trump administration might be planning on banning China’s biggest chipmaker, SMIC (Semiconductor Manufacturing International Corp). Zhang further added that “it’s not just about trade war, or sanctions. It’s a matter of life and death.” If China faces a complete cut off from western technology, it could potentially face a crisis considering the country will take several years to reach levels of self sufficient technology.

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The Trump administration in the United States has started a US-China trade war and has been adding sanctions on Huawei. Now, as per the report, the United States is planning to ban China’s largest semiconductor manufacturer SMIC.

SMIC relies on American chipmaking equipment. If the company gets added to the Entity List, that could make it more difficult to obtain the components needed to develop its capabilities and hurt the production of chipsets.

The US Department of Defence is considering whether the chipmaker aids China’s military and defense apparatus. It alleges that SMIC worked with a large Chinese defense company and that university researchers linked to the military have tailored their work to fit SMIC’s technology. However, the company has denied those accusations.

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Semiconductor Manufacturing International Corporation (SMIC), based in Shanghai, was founded in 20000. It recently raised around $7.8 billion in a secondary listing on the Star Market in July, making it the biggest public offering in China in a decade. For this, the company withdrew its listing from the New York Stock Exchange.

Although the company ranks among the top five semiconductor manufacturers in the world, it is far behind its competitors in terms of technology. While the likes of TSMC and Samsung have started manufacturing 5nm chipsets, SMIC is still using the 14nm process for manufacturing smartphone chips.

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Shanghai-based Semiconductor Manufacturing International Corp (SMIC) last year secured a partnership with Huawei to manufacture some of its chipsets. It later emerged that the Kirin 710A was manufactured at SMIC foundry using the 14nm Finfet process. The chipset was used on the Honor Play 4T and Huawei Enjoy Tablet 2 meaning a level of mass production has been achieved.

SMIC has now announced during an interactive platform held on Tuesday (August 11) that it has now been able to improve the yield rate of its 14nm manufacturing node. Apparently, the company was yet to finish fine-tuning the process but had to test run it with supplies for the Kirin 710A to Huawei who is under pressure to source for an alternative after the USgoovernment tended the ban on the use of US technology on Huawei to foreign companies such as TSMC which usesUS tech for their manufacturing processes.

Huawei has kept the Kirin 710 series chipset alive for a long while now. The Kirin 710 is the first chipset in the series followed by the Kirin 710F.  They are both manufactured using TSMC’s 12nm node and integrates four A73 and four A53 CPU cores, with a maximum frequency of 2.2GHz. However, the Kirin 710A features the same architecture but since it uses SMIC’s 14nm process, the maximum frequency has dropped to 2.0GHz.

The patronage by Huawei has impacted positively on SMIC’s financial standing going by its report for the second quarter of the year. The financial report shows that as of June 30, 2020, the company’s revenue reached US$938 million, an increase of 4% month-on-month and 19% year-on-year. Gross profit was US$249 million, an increase of 6.4% month-on-month, and a year-on-year increase of 64.5%.

The 14nm/28nm advanced process revenue accounted for a new high, reaching 9.1%, compared with only 7.8% in the previous quarter.

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Taiwan Semiconductor Manufacturing Company (TSMC), which is the world’s largest contract manufacturer, has witnessed a record-breaking rise in its shares with a boost of $72 billion this week.

As per the report, for a brief time, the company had become the world’s 10th most valuable corporation before paring gains, thanks to a record 9.9 percent rise. With the company’s valuation going beyond $410 billion this week, it surpassed some of the giants, such as Johnson & Johnson and Visa, among others.

TSMC is one of the most important companies for Taiwan as it maintains much influence on the Taiwanese financial markets. The company itself has pushed the Taiex past a three-decade-old record.

The company is also attracting foreign investments which have led to increasing demand for the local currency. As a result, the Taiwan Dollar reportedly rose 1 percent today (28th July 2020), which is the strongest since April 2018.

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One of the reasons behind the boost for TSMC is the recent announcement from Intel in which the company warned that it is behind schedule to manufacture 7nm chipsets and could outsource production.

Intel is expected to outsource its production to TSMC as the company is a leader in the silicon fabrication business. But it is not only TSMC which has witnessed a surge in shares. Samsung Electronics and China-based SMIC‘s shares also climbed 5.8 percent and 6.6 percent, respectively.

As per the report, Intel and AMD are fighting over TSMC’s 7nm capacity. Intel is set to license the 6nm variant of TSMC’s 7nm technology while AMD could become TSMC’s largest customer next year on the 7nm node, as Apple is moving to 5nm.

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SMIC, the Chinese chipmaker, became one of the most valuable publicly listed companies as its shares witnessed a surge of 246 percent at the opening on its first day of trade in Shanghai, China.

The company, which is at the center of China’s plan to become self-sufficient in chipmaking, had already secured around $7.6 billion in pre-IPO share sales. Half of the company’s shares were initially sold to 4.3 million retail investors.

But there were more clamoring to get in when trading started, which resulted in the trading opening at 95 yuan (~$14) compared to the offer price of 27.46 yuan (~$4). The company’s listing has also attracted a wide range of retail investors such as Zhou Ziqing.

The share sale is the biggest on the mainland in a decade since Agricultural Bank of China’s more than $22 billion dual Hong Kong-Shanghai listing in 2010. It will be interesting to see SMIC’s first week of trading given that the Shanghai Star board has no limit on stock price movements in the first five days.

In an FT report, a senior official at the Shanghai stock exchange noted that the government plans to use its domestic capital markets to raise money towards China’s goal of technological self-sufficiency. The official added: “SMIC is benefiting from US-China tensions. We hope to compete with Nasdaq for Chinese tech companies.”

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SMIC is a contract chip manufacturers, which means that the company makes the semiconductors designed by other firms. It directly competes against the likes of Taiwan’s TSMC and South Korea’s Samsung Electronics.

However, the current technology used by SMIC is far behind its rivals. While others are manufacturing chips on the 5nm node, the Chinese company is still stuck on the 14nm node. But it seems to have started working on improving and advancing its technology.

Recently, as per the reports, Chinese smartphone maker Huawei shifted orders of its 14nm chips from TSMC to SMIC. The resultant chipset — Huawei HiSilicon Kirin 710A — became the first pure Chinese chip with independent intellectual property rights.

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(Source)

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Ever since the US-China trade war began, there have been several major developments in technology, especially those related to smartphones. The ban on Huawei by the United States and the constant lobbying with other countries to do the same, led to several Chinese companies, including Huawei, to become self-reliant.

Now, it seems that China has started a process using which it could become the leader in 5G chipmaking. The Suzhou Institute of Nano-tech and Nano-Bionics under the Chinese Academy of Sciences (Sinano), and the National Center for Nanoscience and Technology, have made important discoveries related to ultra-high precision laser lithography.

For those who are unaware, lithography machines play quite a crucial role in the production of chips as they etch patterns on wafers for placing transistors. One of the biggest breakthroughs has been EUV that creates extremely thin markings.

However, the discovery is still at the theoretical state and it could take years as well as plenty of money to make this a reality. Compared to others, China is still behind when it comes to manufacturing chipsets, which is often outsourced to the likes of TSMC.

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Nonetheless, the discovery of a new process laser lithography by China is a major step forward for the country. ASML, which is the global leader in lithography and holds a monopoly in the market, was recently blocked by the Dutch government from selling its machines to the Chinese customers, after pressure from the United States.

China’s largest foundry — SMIC — still produces chipsets on a 14nm node process while most of the latest chipsets are being manufactured on 5nm node, including the upcoming Apple A14 and Huawei’s next-gen Kirin SoC.

But if the development regarding chip manufacturing in China keeps going at a rapid pace, combined with proper investments, SMIC and similar companies in China could soon start using the latest technology for making chips. This will present an advantage to China and the smartphone makers in the country such as Huawei. In fact, SMIC is reportedly planning to raise $2.8 billion in Shanghai’s Star Market for its growth.

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(Source)

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