News Chinese foundry SMIC is bruised but not broken by U.S. sanctions — revenue still much higher than in 2021 and 5nm node on track

[Admin]

Although SMIC had a rough 2023, the long term may actually be positive for the foundry according to a report.

Chinese foundry SMIC is bruised but not broken by U.S. sanctions — revenue still much higher than in 2021 and 5nm node on track : Read more

 

[Mattzun]

If Tom's article on the cost per transistor being flat since the 28nm node is true and most consumer products had acceptable performance at 10nm or 14nm, I'm not seeing how US sanctions would affect profitability at SMIC. China still has a huge market for producing consumer products that work fine on proven tech.

I imagine the only reason that SMIC is even working on smaller nodes is for niche products like AI accelerators where the cost per transistor is largely irrelevant. Every major country seems to be subsidizing local production of advanced nodes for such products, not just China.

 

[EyadSoftwareEngineer]

Producing 5nm nods means that US restrictions obvisouly has failed

 

[Notton]

Producing 5nm nods means that US restrictions obvisouly has failed

That's a maybe.
It takes time to feel the effects of sanctions and restrictions.
Due to its lengthy nature, it can also be counteracted.

It's similar to how humans can be wounded, but the severity and outcome depends on how quickly the injury is treated.

 

[JTWrenn]

That's what happens when companies are directly tied to a countries governments. Unless China goes down their fab company isn't going to go down. It's all a house of cards though, and I wonder if we will ever really know what the financials in China look like. I doubt it.

The thing is trusting any of these numbers given China's penchant for not following the rules is likely a mistake. It might be true, it might be false, so it doesn't really tell us anything.

 

[ThomasKinsley]

These articles are swinging wildly back and forth between positive and negative outlooks on SMIC. SMIC is backed by the government, which means their financial situation is secured for now. Sanctions is really a matter of how much the Chinese government must spend on their tech sector to keep it advancing. If it were not for sanctions, that money could've been spent elsewhere, so the tech sector is not the one to watch for success or failure. It's the other sectors.

 

[Geef]

I'm not seeing how US sanctions would affect profitability at SMIC. China still has a huge market for producing consumer products that work fine on proven tech.

My exact thoughts. There are 2 billion people in China and I'm sure at least 330 million of them want some kind of tech that can be made by SMIC.

 

[ivan_vy]

These articles are swinging wildly back and forth between positive and negative outlooks on SMIC. SMIC is backed by the government, which means their financial situation is secured for now. Sanctions is really a matter of how much the Chinese government must spend on their tech sector to keep it advancing. If it were not for sanctions, that money could've been spent elsewhere, so the tech sector is not the one to watch for success or failure. It's the other sectors.

well, USA is doing the same with CHIPS Act,also Japan and Europe

Japan and the European Chips Act - EIAS

Upscaling the production of high-end electronic components and securing resilient supply chains the EU and Japan are offered a unique opportunity to forge closer ties and truly realize their respective and joint potential.

eias.org

tech companies are dragged in the proxy war for tech supremacy between countries, meanwhile we consumers pay more and more with every iteration.

 

[ThomasKinsley]

well, USA is doing the same with CHIPS Act,also Japan and Europe

Japan and the European Chips Act - EIAS

Upscaling the production of high-end electronic components and securing resilient supply chains the EU and Japan are offered a unique opportunity to forge closer ties and truly realize their respective and joint potential.

eias.org

tech companies are dragged in the proxy war for tech supremacy between countries, meanwhile we consumers pay more and more with every iteration.

I'm hoping the fierce competition and subsidies result in extremely low chip prices for mainstream users. We've reached a plateau where even a modest i3 can run most office applications. The next generation of ARM and RISC-V promises much more.

 

[Pierce2623]

Producing 5nm nods means that US restrictions obvisouly has failed

I guess if their “5nm” didn’t cost significantly more than TSMC 3nm while being significantly worse than TSMC 7nm, I’d probably agree. Their “7nm” node had clocks and efficiency worse than TSMC 10nm, and actually closer to 14nm.

 

[Pierce2623]

These articles are swinging wildly back and forth between positive and negative outlooks on SMIC. SMIC is backed by the government, which means their financial situation is secured for now. Sanctions is really a matter of how much the Chinese government must spend on their tech sector to keep it advancing. If it were not for sanctions, that money could've been spent elsewhere, so the tech sector is not the one to watch for success or failure. It's the other sectors.

The bottom line is the performance and efficiency of these SMIC nodes do not correlate closely at all with nodes of the same “nm” from the three leading edge silicon fab companies in the world. The Kirin 9000s has core architectures that should be performing like a snapdragon8+gen1 but it has performance like sd865, but using nearly double the power to get there.

 

[williamcll]

Looking forward because I'm more than certain American and Japanese made 5nm chips are going to be just as expensive as Samsung and TSMC wheres SMIC chips are going to popup up in random cheap Walmart intelligent appliances and computers.

Remember the "good old days" when Texas instruments made comparatively fast chips that could power tablets of its time?

 

[Avro Arrow]

This doesn't surprise me at all. I have always said "Underestimate the Chinese at your own peril." and things like this are why. They're incredibly resilient, more resilient than most people give them credit for.

 

[anonymousdude]

Producing 5nm nods means that US restrictions obvisouly has failed

You mean the part where it was known that you could produce 7nm and 5nm without EUV? Just because you have the ability to produce doesn't mean you can do it at scale i,e good enough yields. TSMC and Intel 7nm used only DUV. EUV just makes everything easier and faster, so you can produce more chips. We also don't know that much about the SMIC 5nm performance characteristics. That being said it'll be good enough for the vast majority of uses.

Also sanctions have multiple uses. You prevent, delay, and siphon money from other industries. Obviously the intent here wasn't to prevent so much as to delay. Otherwise you would have cut off DUV and other equipment much earlier. Instead the sanctions were much more targeted for various reasons. Some of which we're not to discuss in these forums. In any case the true effects of the sanctions will be seen in the coming years. Where does SMIC go from here to get to 3nm and lower? How do these delays affect their long term business? How does it affect other industries that the Chinese government could have invested in, but instead had to pour billions into their semiconductor industry?

 

[williamcll]

How does it affect other industries that the Chinese government could have invested in, but instead had to pour billions into their semiconductor industry?

Barely because this is new expenditure that's already paying off by remaining cheaper than buying offshore. The rest of the world will learn to live with ever increasing chip prices