Chinese semiconductor industry

tokenanalyst said:

However, after interviewing more than 10 industry executives, it was found that many semiconductor equipment manufacturers have low willingness to expand their parts factories, and it is difficult to find alternatives.

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This last sentence in the quoted report is quite interesting. If the SME manufacturers "have low willingness to expand", this means they smell a bubble in the making. Each of the competing fabs is expanding with a view to capturing all of the new demand, which means there will be over-investment. When this plays out, orders for semiconductor equipment will crash. Therefore, for SME manufacturers, expansion simply does not pay off, and a steady level of production, maybe works better.

But then there is the geopolitical dimension. While global SME manufacturers are reluctant to expand, the Chinese players are expanding explosively, as they face entirely opposite incentives. Expansion will pay off in the shape of a decent slice of the market, plus there is huge government support. This is an additional powerful argument against expansion for the incumbent global companies. Therefore globally, the problem of chip shortage has expanded to SME equipment shortage.

This situation buys time for China, and tends to minimize the technological disadvantages it faces.

Red Moon said:

This last sentence in the quoted report is quite interesting. If the SME manufacturers "have low willingness to expand", this means they smell a bubble in the making. Each of the competing fabs is expanding with a view to capturing all of the new demand, which means there will be over-investment. When this plays out, orders for semiconductor equipment will crash. Therefore, for SME manufacturers, expansion simply does not pay off, and a steady level of production, maybe works better.

But then there is the geopolitical dimension. While global SME manufacturers are reluctant to expand, the Chinese players are expanding explosively, as they face entirely opposite incentives. Expansion will pay off in the shape of a decent slice of the market, plus there is huge government support. This is an additional powerful argument against expansion for the incumbent global companies. Therefore globally, the problem of chip shortage has expanded to SME equipment shortage.

This situation buys time for China, and tends to minimize the technological disadvantages it faces.

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Yeah, exactly.

This game is rigged.

We just gotta know, which way the rigged is going.

AndrewS said:

Isn't TSMC only expanding with EUV lithography, and not DUV lithography machines?

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EUV is only used for the front end portion, it is not cost effective to use DUV for interconnects.

Red Moon said:

This last sentence in the quoted report is quite interesting. If the SME manufacturers "have low willingness to expand", this means they smell a bubble in the making. Each of the competing fabs is expanding with a view to capturing all of the new demand, which means there will be over-investment. When this plays out, orders for semiconductor equipment will crash. Therefore, for SME manufacturers, expansion simply does not pay off, and a steady level of production, maybe works better.

But then there is the geopolitical dimension. While global SME manufacturers are reluctant to expand, the Chinese players are expanding explosively, as they face entirely opposite incentives. Expansion will pay off in the shape of a decent slice of the market, plus there is huge government support. This is an additional powerful argument against expansion for the incumbent global companies. Therefore globally, the problem of chip shortage has expanded to SME equipment shortage.

This situation buys time for China, and tends to minimize the technological disadvantages it faces.

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yes but also:
- Making SME is expensive, parts are much expensive.
- The requirements just too strict, training qualified personal takes time, different from others industries the acceptable failure rate has to be much lower, new suppliers has to be validated.
- The clients are just too few to risky it. That is one of the reasons why U.S companies are lobbying the hell out of D.C. to avoid export controls on China.
But with this shortage Western SME companies are probably going to prioritize some big companies instead of China, that could leave more room for Chinese players to try expand and try to get even more market share in China

With a total investment of 500 million yuan, the Yanzi thin film deposition equipment project was signed and settled in Laixi, Shandong​

According to the Laixi Economic Development Zone, the project has a total investment of 500 million yuan. After the project is put into production, it will become the third semiconductor film deposition equipment company in the industry and the first in Shandong Province to connect to the production line of the chip head enterprise and realize mass production. Break the monopoly of foreign technology and promote the localization of semiconductor core components. The Economic Development Zone Management Committee will continue to introduce industries such as melting single crystal silicon, semiconductor electronic special gas, and diffuser production in the semiconductor material area to accelerate the agglomeration of a new generation of information technology industries in Laixi City.

It is reported that Shanghai Yanzi Intelligent Technology Co., Ltd. focuses on the core semiconductor process - the manufacture and production of chemical thin film deposition equipment, and its core product VPE reactor has been independently controllable. (Proofreading / Xiaobei)

tphuang said:

And if you think everything will go smoothly, you can long their stocks. I am simply telling you that things don't run on time here and tsmc will be in a huge shock at how expensive American labor is and how hard it is to find qualified employees to work at their plant.

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Well, I guess they are already well beyond the surprise factor now.

First of all, the decision to build a new fab in US was made out of arm twisting more than business logic. I remember TSMC didn't want to go there, and even asked their government for support, at the end they carved in to US request (expecting for their government to protect against US, is believing in fairy tales).

In 2-3 years time they will be in fierce competition for scarce human and equipment resources with Intel...guess who will have the upper hand?

OTH I am not so sure they really want to open the US fab as soon as possible. Opening their new Taiwan fab 6 months later would be a huge disappointment for them, but opening US fab even 12 months later....maybe is not so bad after all, as long as costs are covered. Remember that they didn't want to go there in first instance, and that in the long term, building state of the art capacity in US will be the beginning of the end for Taiwan leadership in IC market.

A leadership that is doomed to fail anyhow sooner or later, simply because IC is a too sensible and geopolitical strategical subject for the big players to leave it in the hands of a small island with a very uncertain future.

To me it is already a miracle (and a big overlook) that US has allowed Taiwan to reach the current dominant position....but I'm sure they will fix it.

(Yicai Global) April 8 -- Chinese ink product seller Dinglong has gained a major order for its self-developed chemical used in chip manufacturing, marking an important step for semiconductor firms toward domestically developed materials.

A mainstream domestic wafer maker placed an order to purchase 20 tons of polishing liquid that is used in wafer processing from Dinglong's unit Dingze New Material Technology, the Hubei province-based supplier said in a statement today. It did not disclose any financial details about the deal.

This means that Dingze can independently produce all the materials needed in wafer polishing, said Dinglong. Chinese chip manufacturers used to rely on foreign companies' products in the chemical mechanical polishing process that is done to smoothen the surface of the wafer.

The above-mentioned product is being assessed and promoted among several mainstream wafer makers, the firm added. The company can produce 5,000 tons of the product per year but may expand production capacity based on market demand.

Dinglong's stock price [SHE: 300054] climbed 0.5 percent to CNY19.84 (USD3.10) in the afternoon.

ARM sold ARM China

tonyget said:

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Yes, it will ... very obvious