US employs a two-pronged plan to halt China’s advances in semiconductor technology

Following the recent expansion of US export regulations on semiconductor equipment to include processing tools for 14 nm and below, which was confirmed by two US equipment manufacturers, news from Reuters on August 2 reported that the US is also considering a ban on the shipment of equipment to Chinese memory chip manufacturers, marking the first time that export regulations have specifically targeted non-military application chips.

The 14 nm fab equipment prohibition would primarily affect Chinese foundry companies SMIC and HLMC, along with other equipment producers like KLA, LAM Research, etc., who are currently working on processing technologies for 14 nm and lower.

It has long been rumored that the US is going after Chinese memory producers like Yangtze Memory Technologies Co Ltd (YMTC), according to supply chain sources who spoke with DIGITIMES. It remains to be seen whether the US government would follow Apple’s decision to accept its goods. Stakeholders and the authority have not yet formally validated the report.

According to Chen, YMTC is already producing NAND chips with more than 128 layers at 1x level, which is comparable to 17–19 nm nodes, and will only encounter difficulties when attempting to create NAND chips at more sophisticated levels.

“The most recent nodes from Samsung and SK Hynix have already pushed to 1a or 1b, which is below 14 nm. For instance, Samsung has begun producing 176 layers of cutting-edge technology in their Xian factories, which will undoubtedly be damaged if the crackdown extends to shipments to China rather than focusing on certain businesses “said Chen.

According to Reuters, the action is an attempt to protect American businesses and slow China’s advancements in the semiconductor industry. However, since American equipment manufacturers like LAM Research and Applied Materials are the main suppliers of such instruments, the new regulation would also cause them to lose market share in China.

Another scenario, according to Chen, is the operation against the 14 nm node equipment. By adopting DUV technology to produce 7 nm chips or even more sophisticated goods, it is believed that SMIC’s fight will be more tightly controlled.

According to Techinsights, SMIC’s 7 nm chips, which are believed to be copies of TSMC’s N7 node from four years ago, are used in a MinerVa bitcoin miner. According to sources, TSMC did first begin producing N7 with DUV but later switched to EUV to reduce costs. After numerous exposures and lithography-etches, experts agreed that it is accurate to assert that liquid immersion DUVs can manufacture 7nm or even 5nm chips, although the yields are low and unreliable. Sources claim that SMIC is currently using DUV equipment to validate the 5 nm processing node.

Nobunaga Chai, an analyst with the Photonics Industry and Technology Development Association (PIDA), told DIGITIMES Asia that although employing DUVs to make 5 nm or 7 nm chips is possible, it is neither economical nor practical from a business standpoint.

But that would be a different matter, according to Chai, if they were doing it to show that they could still produce advanced semiconductors despite the stringent export restrictions put in place by the US. He continued by saying that China is already capable of designing successful 5 nm chips for cellphones.

The US government has prohibited ASML, a manufacturer of EUV technology, from shipping its products to China and has most recently added ASML DUVs to the prohibition. There will undoubtedly be significant changes in the semiconductor war game for the coming decade if it is confirmed that regulation will forbid machines used to process semiconductors with a process node size of 14 nm or below as well as those machines used to manufacture memory products.


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