Currently, we have a very big trade cold war between China and the United States. The Americans are imposing a set of sanctions and restrictions on access to technology, specifically, chip manufacturing machinery. Nevertheless, SMIC and Huawei They have gotten advance in the processes of processor manufacturing by way of very fast, even with the sanctions and restrictions that apply.
China cannot buy the latest technology machines from the Dutch ASML. The European company is the one that designs and manufactures the machines necessary for the production of chips. The reason is that the United States has added a lot of Chinese companies to its “black list.”
The reason for these American moments is to limit the growing impact China has on the industry. In recent years they have grown a lot and that cannot be tolerated. So they invent any reason to sanction the Chinese and limit their access to technology.
The industry is amazed that China is advancing despite the sanctions
They cannot buy the latest generation machines, but they can “old” machinery. The limit is set at 18nm manufacturing process, From then on, they cannot place orders to ASML. Since this is the only company in the world that manufactures and sells these systems, China has a problem.
He former vice president of TSMC, Burn J. Lin, has been interviewed by Bloomberg. He has stressed that US sanctions cannot stop the advance of Chinese semiconductor companies. He highlights that SMIC and Huawei They are using “old” machinery to make advanced chips.
SMIC has managed to manufacture processors with a node 5nmdespite using scanners and other “obsolete” machines of ASML. Due to sanctions, China is experimenting with new packaging materials and techniques to achieve higher yields.
This is how SMIC has managed to develop the HiSilicon Kirin 9000S processor manufactured in the node 7nm. This processor has been used in the smartphone Mate 60 Pro. The company is already working on producing chips based on the 5nm node and other more advanced manufacturing processes.
Lin has been very clear and has said that it is not possible for the United States Government to prevent progress in chip manufacturing in China. It will be more complicated, that is obvious, but if the Chinese have something, it is that, when faced with a bad situation, they start working harder to solve the problem.
Be careful if China ends up getting tired of this pressure
You should know that the situation is more tense than one may think. China wants to recover Taiwan, an island off its coast that is highly strategic. The island contains TSMC, the largest foundry in the world today.
To give you an idea, some of TSMC’s clients are Intel, AMD, NVIDIA or Qualcomm, among many other companies. This already lets us see the strategic importance of the company.
A hypothetical invasion and conquest of the territory would respond to a Chinese strategic step. Firstly, they could be made with the secrets of the largest chip manufacturers in the world and advance decades in a very short time. In addition, it could lead to a collapse of the world market if new sanctions were added.
Finally, if the foundry facilities were damaged, we could see unprecedented component shortages. No one in the world has the capacity to absorb the demand. NVIDIA already tried giving the RTX 30 Series to Samsung and the result was quite poor.
