SMIC (Semiconductor Manufacturing International Corp.) It is China’s largest semiconductor manufacturer. Currently, its global market share hovers around 5%, far from the 17% of Intel and Samsung, and much further away from the 54% of the Taiwanese giant TSMC. Even so, it is on the heels of the North American GlobalFoundries, which has an approximate participation of 7%. These numbers clearly reflect its relevance in the integrated circuits market.

Despite everything, he has a formidable rival against him: the United States. The country led by the Joe Biden administration put the entire Chinese semiconductor industry in the crosshairs on October 7, 2022, and it did so with one purpose: to prevent this Asian country from being able to develop highly integrated chips similar to those currently produced by TSMC. , Samsung or Intel. SMIC is its spearhead, which has placed this company at the forefront of the US blacklist.

In practice, what the US government seeks is to prevent photolithographic equipment developed with patents under its control fall into the hands of China. The two main suppliers of advanced lithographic machines are ASML, which is from the Netherlands, and Tokyo Electron, which is a Japanese company, but both use American and other technologies. Without going any further, ASML’s extreme ultraviolet lithography machines use an American light source and optics of German origin.

SMIC has problems equipping its new semiconductor factories

During the last quarter of 2022, the global demand for integrated circuits has significantly decreased and 2023 has not started better for this sector. Still, according to TSMC, the dark clouds will begin to dissipate in the second half of this year and gradually the demand for chips will grow again. The industry’s medium-term expectations are positive, despite the fact that the moment is not going well, which has led companies that are setting up new factories, such as TSMC or Intel, to reinforce their investments.


US administration seeks to curb China’s production of highly integrated chips

SMIC is currently engaged in the construction of two factories: the one in Lingang, whose main building is ready, and the one in Xiqing, which has just started. In addition, one of its new factories in Shenzhen started large-scale semiconductor manufacturing in December 2022, and the Jingcheng factory, which is also new, is ready to start production trials. Although, won’t be able to do it in the short term. The reason is that this last plant did not receive all the lithography equipment needed to function normally.

The foot of the United States is behind this trip. Indeed, its sanctions expressly seek to prevent the arrival of new photolithography machines to Chinese factories that produce chips of 14 nm or less, DRAM integrated circuits of 18 nm or less, or NAND chips. glare with 128 layers or more. It is evident that, as we anticipated a few lines above, the US government is seeking to restrict the production of highly integrated chips in China.

The only option for China, given the current situation, is none other than to become completely independent of the United States and its circle of influence in the field of chip manufacturing. The problem is that developing alternatives to US-patented technologies is not something that can be done quickly. Still, it is very likely that China has been at this for a long time. In any case, we cannot ignore that these sanctions are also indirectly penalizing US companies, in whose customer portfolio some Chinese companies occupy a prominent position. That’s what globalization has.

cover image: ASML | SMIC

More information: SMIC