China focuses on developing semiconductor chip industry in face of US sanctions
(Baonghean.vn) - In the face of US sanctions, China has taken drastic steps to develop its domestic industry, aiming for self-sufficiency in the field of semiconductor chip manufacturing.
In 2023, China's semiconductor industry became the focus of attention when the US imposed sanctions to limit the country's access to advanced technology.
While the US is ramping up sanctions, China is pouring more financial resources into its semiconductor industry. US sanctions have only slowed down but not stopped the development of China's semiconductor industry.
According to recent reports, China is raising an additional $27 billion from government institutions, state-owned enterprises and the private sector for the National Integrated Circuit Industry Investment Fund, which currently has an authorized capital of about $45 billion.
This would likely make the total funding for China's semiconductor industry over five years (2022-2027) about three times the US government's $52.7 billion in subsidies for semiconductor manufacturing under the Science and CHIPS Act.
In fact, China’s semiconductor industry policy seems to be working quite well. Despite reports of financial mismanagement and production schedule setbacks, China’s leading integrated circuit (IC) manufacturer, SMIC, is now producing 7nm semiconductor chips and is developing 5nm.
Although US Commerce Secretary Gina Raimondo has proposed sanctions aimed at blocking China’s access to advanced technologies for manufacturing semiconductor chips smaller than 10nm, making it impossible to produce advanced smartphone chips, public information from lithography system manufacturers ASML (Netherlands) and Nikon (Japan) shows that this has not happened.
As a result, the US government recently expanded its sanctions in the lithography technology sector, restricting exports to the Chinese market not only of EUV lithography systems from the Dutch company ASML but also of DUV lithography systems produced by both ASML and Nikon of Japan.
These expanded sanctions take effect in the second half of 2023, which is believed to be too late to prevent the launch of Huawei's Mate 60 Pro 5G smartphone with a processor using 7nm semiconductor chips manufactured by SMIC.
As a result, in February this year, the US Department of Commerce ordered semiconductor supplier Entegris and other US companies to stop supplying advanced components and materials to SMIC.
The US government is now pressuring the Netherlands and Japan to force ASML and Nikon to stop servicing DUV lithography systems that were sold to China before the sanctions were tightened. The US is also reportedly asking Japan to stop selling photoresists and other chemicals used in semiconductor manufacturing to China.
Regarding this issue, on March 8, Japanese Minister of Economy, Trade and Industry Ken Saito told Nikkei Asia: "We have no plans to implement the US's requests at this time."
Meanwhile, according to preliminary reports, the Netherlands' response to this issue is also unclear.
In a further escalation of sanctions, the US Department of Commerce is considering adding China's leading DRAM maker Changxin Memory Technologies (CXMT) and five other Chinese technology companies to the Entity List, which would deny them access to advanced US technology.
Recently, there has been a lot of information that two American semiconductor companies, Applied Materials and Lam Research, have provided equipment to Chinese semiconductor company SMIC to produce 7nm semiconductor chips for Huawei.
In fact, most of the world's leading semiconductor manufacturers are heavily dependent on the Chinese market. China is considered the largest market for semiconductor companies in the world.
Semiconductor industry sources estimate that China now produces about 20% of the semiconductors it consumes, up from 10% recently. With at least 20 new production lines under construction in China, that figure looks set to rise to at least 30%, and potentially 50%, by the end of the decade.
In short, China is now focusing on developing its semiconductor industry to reduce its dependence on foreign suppliers and cope with US sanctions. This effort includes investing in research and development, building new manufacturing plants and attracting talent.
China's semiconductor industry has made significant progress in recent years. However, there are still many challenges to overcome, such as dependence on foreign suppliers for key raw materials and equipment.
