There are zero reasons for SMIC to build a fab in Europe using Chinese equipment when they can build them in China. The only gain from building a fab in Europe is - as european_guy said - to gain some experience in operating EUV equipment, that's it, and I already laid out why I think this is not really super attractive option. Moreover, it would be a miracle if SMEE is able to catch up with the domestic demand for their equipment, I think the exports simply won't be possible any time soon due to limited supply.
Chinese semiconductor industry
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@xypher bro there is no permanent enemy only interest. In 2025 China will have its EUVL, so the window is slowly closing, ASML is trying to maintain its lead by over engineering it , making it costly and difficult to produce. An EUVL powered by SSBM is a gamechanger and IF successful, will ASML make a deal? why not join the Chinese and make use of the SSBM by selling ASML LEns and optics. win win. Cutting off the American (Cymer)
broadsword
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Will be possible when China is ahead in fabbing and then build a two-generations behind state-of-the-art EUV fabbing plant in the EU.
no, still far too dangerous. 2 generations behind current state of the art EUV is 14 nm which is a highly advanced node that only 6 companies in the world have been able to achieve (TSMC, UMC, SMIC, Samsung, GloFo, Intel). Everyone else has quit.
At 3 nm node, 2 generations behind state of the art would be 7 nm which is something only 3 companies have been able to achieve (TSMC, Samsung, soon SMIC).
if SMIC builds a EU fab then EU needs to make a giant concession.
Hi there, I do apologize that you got such a negative response for a very benign question. Unfortunately you are on a very nationalistic forum where the view is often all westerners = bad and Europeans = puppet. From my point of view, there is quite a big difference between the relationship of US and UK/Australia vs US and continental Europe. That's especially true when we consider Germany sells more dual use equipment to China than anywhere else. A lot of the motor used in Chinese naval ships/helicopters are licensed manufactures of European products. A lot of the US pressure on European countries don't really benefit European countries all that much, but do serve US strategic goals (like giving up Nord Stream 2).
The problem in your proposal is the lack of trust China would have for Europe right now. There is no guarantee that continental Europe would not buckle under American pressure as we can see with several EU nations limiting 5G market from Huawei. I think a lot of this would depend on European public opinion which could be at an all time low due to COVID. I'm not sure China could risk investing a lot of money and get nothing out of it.
It is critical to focus on technological node here, SMIC is expanding 14-28nm capacity, not sub 7nm capacity. The latter at the moment cannot be built in China.
I agree that a JV endorsed by European Commision is a must, otherwise the project is doomed to fail.
I don't agree that this would be impossible to achieve. Of course US has strong lobbying in Europe Commission, but as I said there is not a single voice is Europe. The outcome of this attempt, indeed would be very uncertain....it can go both ways, it is impossible to know for sure now.
I agree that it would be very difficult for Europe to build a 5nm fab all by itself, but this is a very good advantage for SMIC, because it can offer something that Europe alone cannot and this has weight for discussions with EU commission.
Regarding who benefits more, with all the due respect, this is somewhat a bit shortsighted, SMIC should see what advantages they have, and I guess they have a lot, but even more advantages has the vast chinese fabless ecosystem, especially in AI and other advanced technologies because they would have a trusted supplier. In my opinion it is much easier for US to block TSMC or Samsung than blocking an European JV strongly endorsed by European Comission.
Finally a brief comment on times. I think achieving state-of-the-art 5-10 years sooner it makes a lot of difference. What US is trying to do is to slow down China, not to stop it, because they know it's impossible, but for US also slowing down of 5-10 years is a big win, and actually it is. For them it means to have the time to prepare themselves and be ready and reaming ahead of China when China reaches EUV.
Thanks for your kind reply. Actually I think I had a very positive feedback, a lot of very legitimate concerns, as I was asking for. The fact that some answers where very straight and direct it's ok with me.
Absolutely there is no guarantee of anything here, nobody knows how such an attempt would go, neither EU Commisisons, neither US, neither SMIC.
Regarding Huawei, ban, the damage for Europe has been mainly economical, to find a more expensive 5G supplier. But here the eventual ban of a JV would mean a strategic damage for Europe because the fab woule be in Europe with Europeans firms in JV, so it is at another level, that's why I think it would be more difficult for US to block than with Huawei.
I'd think the most difficult part would be to get OK from European Commission, because it is there where the political-lobbying battle would be fight, so even a failure from SMIC JV would not mean an economical damage, because that would be a prerequisite step, before any actual investment would go in.
It's not just a matter of cost to find a Huawei alternative.
In many places, you're talking about a 2+ year delay in the deployment of standalone 5G networks in Europe.
If European telecoms networks had been able to use Huawei, European companies potentially could have edged out US companies in the development of 5G applications, because the US telecoms industry had hobbled itself, for a variety of reasons.
Those 2+ years mean US companies are more likely to deploy 5G applications at scale first, and then colonise the European market like what happened with 4G and the development of smartphone apps.
ASML is very sure that Chinese companies cannot come up with EUV machines.
That feeds into US decision-making on semiconductor sanctions on China.
The doves don't believe in sanctions on China.
The hawks do believe ASML when they say that semiconductor sanction will permanently retard China's semiconductor development.
The moderates aren't sure, but they can definitely see short-term benefits.
The EU should first manouver this nord stream 2 crisis. European industrial base depends on this because if nord stream 2 is cancelled EU factories will lose their edge and profits or move to the US and China because they have secured their energy suppliers.
So the next couple of months regarding nord stream 2 might pretty much determine the EU short term future.
For getting EUV I think a good cut off date for China will be 2025 getting EUV sub 10nm nodes will be the cherry on top of the made in China 2025 cake.
So the next couple of months regarding nord stream 2 might pretty much determine the EU short term future.
For getting EUV I think a good cut off date for China will be 2025 getting EUV sub 10nm nodes will be the cherry on top of the made in China 2025 cake.
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