US can’t stop SMIC, Huawei’s technological advance, says Chip Guru

(Bloomberg) — The United States will not be able to block Chinese companies including Semiconductor Manufacturing International Corp. and Huawei Technologies Co., Ltd. From making progress in chip technology, according to a leading figure in the semiconductor industry.

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SMIC and Huawei, which surprised Washington by unveiling a phone processor made in China, could use existing older machinery to make more advanced silicon, said Bern J. Lin, a former vice president of Taiwan Semiconductor Manufacturing Co. Lin, who at TSMC championed the lithography technology that has transformed the chip industry, said SMIC should be able to advance to next-generation 5nm using machines from ASML Holding NV it is already working on.

Huawei excited the chip industry when it unveiled a 7-nanometer processor made by SMIC in the Mate 60 Pro, sparking celebrations in China and accusations in the United States that a campaign to contain the rise of the technology in the country had failed. Yangtze Memory Technologies Co., Ltd. Now also producing some of the most advanced memory chips in the industry. In October, the Biden administration tightened existing restrictions to close loopholes through which the country might gain access to advanced U.S. equipment, marking a new phase in the struggle to influence technologies critical to the economic and political balance.

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But that may not stop China’s technological rise, said Lin, who is highly regarded in the industry for being the first person to propose submerged lithography, the technology on which ASML’s core products are based.

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SMIC used ASML’s immersion lithography machines to manufacture a 7nm chip for Huawei. In addition to trying to reach the 5nm level, China will likely experiment with new materials or advanced chip packaging to make more powerful semiconductors, Lin said. SMIC shares rose as much as 5.8% in Hong Kong, their biggest gain in about two weeks.

“It is not possible for the United States to completely prevent China from improving its chip technology,” Lin said in an interview this week at National Tsinghua University in Hsinchu, where he is dean of the School of Semiconductor Research. That echoed comments from Arm Holdings Plc Chairman Rene Haas this month.

Lin added: “What the United States should really do is focus on maintaining its leadership in chip design instead of trying to limit China’s progress, which is futile because China is adopting a whole-nation strategy to promote the chip industry, hurting the global economy.” .

In fact, the United States may have unwittingly given SMIC a golden opportunity, he said.

In 2020, Washington effectively blocked TSMC – the world’s most advanced silicon supplier to Apple Inc. And Nvidia Corp. – From dealing with Huawei. That’s when SMIC came forward to inherit huge orders that helped it improve its manufacturing technology, Lin said. Representatives for SMIC and YMTC did not respond to requests for comment.

A debate is now raging in the United States and abroad over whether Washington and its allies should intensify the Chinese containment campaign. US Commerce Secretary Gina Raimondo said Washington has no evidence that China can make advanced chips “at scale.” But Commerce Under Secretary for Industry and Security Alan Estevez said it was an “absolute” concern for Washington that the Asian country could use 7nm technology – or better – in military applications.

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Industry analysts, including Jeff Pu of Haitong International Securities, have estimated that Huawei could build as many as 70 million smartphones using its Kirin chips in 2024 — not insignificant compared to the roughly 220 million iPhones it ships. Apple annually.

In another area of ​​concern to Washington, China is also making progress in memory chips — a type of silicon that is more commoditized than processors but still important in everything from smartphones and AI training servers to military drones.

Canadian research firm TechInsights Inc. discovered An advanced chip made by Yangtze Memory in a solid-state drive launched around July — months after U.S. restrictions announced last year forced foreign equipment suppliers to cut ties with the Chinese semiconductor company. TechInsights, which uncovered SMIC and Huawei’s 7nm chip through a joint investigation with Bloomberg News, found a 232-layer quad-level 3D NAND cell to die during a routine teardown of the device, calling it one of the most advanced devices it has seen.

“YMTC has been quietly developing advanced technology despite the hurdles it faces due to issues following sanctions,” TechInsights said in a blog post on Tuesday. “Evidence is mounting that China’s momentum to overcome trade restrictions and build its own domestic semiconductor supply chain is more successful than expected.”

-With assistance from Gao Yuan, Ian Qing, and Jin Lanhe Li.

(Updates with SMIC engagement action from paragraph 5)

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