News China's chipmaking champion struggles —SMIC fab warns that it could see declined profits due to increasingly tense economy and geopolitics

[Admin]

Though SMIC's Q4 results beat expectations, the foundry says 2024 could be challenging due to the economy and politics.

China's chipmaking champion struggles —SMIC fab warns that it could see declined profits due to increasingly tense economy and geopolitics : Read more

 

[The Historical Fidelity]

Well, this is to be expected when trying to compete with TSMC without access to EUV. Their 7nm and 5nm processes are defect ridden and require quad patterning steps which raises both SMIC’s cost to produce chips as well as the price they can offer their customers. I think at some point the PRC government will either step in with subsidies or nationalize the firm as SMIC is too important to domestic chip production to lose.

 

[scottslayer]

B-but Tom's articles told me over the past month that China was going to beat the West in chip manufacture and that the sanctions are worthless...

 

[Gururu]

Its intriguing that the U.S. believes they need an export license to keep things in China just because they use U.S. technology. Are they talking about machinery?

 

[peachpuff]

B-but Tom's articles told me over the past month that China was going to beat the West in chip manufacture and that the sanctions are worthless...

Probably because those articles were written by Anton, this author is more realistic.

 

[The Historical Fidelity]

Its intriguing that the U.S. believes they need an export license to keep things in China just because they use U.S. technology. Are they talking about machinery?

That’s technology license contracts for you

 

[George³]

Well, this is to be expected when trying to compete with TSMC without access to EUV. Their 7nm and 5nm processes are defect ridden and require quad patterning steps which raises both SMIC’s cost to produce chips as well as the price they can offer their customers. I think at some point the PRC government will either step in with subsidies or nationalize the firm as SMIC is too important to domestic chip production to lose.

TSMC didn't use ASML high na EUV soon.

 

[xterx1234]

Well, this is to be expected when trying to compete with TSMC without access to EUV. Their 7nm and 5nm processes are defect ridden and require quad patterning steps which raises both SMIC’s cost to produce chips as well as the price they can offer their customers. I think at some point the PRC government will either step in with subsidies or nationalize the firm as SMIC is too important to domestic chip production to lose.

More like competing to the US government. I think China wouldn't have so much initiative to forcefully create their own equipments needed to produce microprocessors if not of the Bans.

 

[Co BIY]

B-but Tom's articles told me over the past month that China was going to beat the West in chip manufacture and that the sanctions are worthless...

I disagree that Tom's put forward that view. Chinese firms sometimes put out positive press about their progress that Tom's reported even when their tech executives often gave more realistic statements, that Tom's also covered.

Some comment posters definitely put down the line that sanctions were worthless because they wouldn't work, but they were balanced by others in the forum.

OTOH

20% margins last year and 11% probably next year - That is about average for the S&P 500. They are not going out of business,

 

[The Historical Fidelity]

More like competing to the US government. I think China wouldn't have so much initiative to forcefully create their own equipments needed to produce microprocessors if not of the Bans.

Your response is already addressed in my comment. No need to reiterate the stated fact that SMIC does not have access to ASML EUV tools

 

[The Historical Fidelity]

TSMC didn't use ASML high na EUV soon.

What does this have anything to do with what I said? TSMC uses 13nm single pattern feature size limit EUV for its 7nm and smaller processes while SMIC is forced by sanctions to use 45nm single pattern feature size limit immersion DUV in a quad pattern method to reduce feature size to EUV levels which is defect ridden and costly.

Regular EUV can easily be utilized to create 2nm and 1.5nm processes using double patterning method. It’s when you go above double patterning that the defect rate makes viability questionable which is the point that TSMC is anticipating purchasing high NA EUV for its 1nm and smaller processes.

 

[xterx1234]

What does this have anything to do with what I said? TSMC uses 13nm single pattern feature size limit EUV for its 7nm and smaller processes while SMIC is forced by sanctions to use 45nm single pattern feature size limit immersion DUV in a quad pattern method to reduce feature size to EUV levels which is defect ridden and costly.

Regular EUV can easily be utilized to create 2nm and 1.5nm processes using double patterning method. It’s when you go above double patterning that the defect rate makes viability questionable which is the point that TSMC is anticipating purchasing high NA EUV for its 1nm and smaller processes.

I think he commented that SMIC is not really trying to compete but they are just using any technology possible that is in their possesion since they cannot western tech. I think at this point, SMIC is trying to produce products for Huawei only. I also read that SMIC is charging Huawei more in their services.

Ps. Please correct me if I am wrong.

 

[The Historical Fidelity]

I think he commented that SMIC is not really trying to compete but they are just using any technology possible that is in their possesion since they cannot western tech. I think at this point, SMIC is trying to produce products for Huawei only. I also read that SMIC is charging Huawei more in their services.

Ps. Please correct me if I am wrong.

Correct, they are charging Huawei more, so they SMIC can have some form of margin.