Chinese semiconductor industry

ansy1968 said:

@pecopls no problem just want to lightened up the mood. Brother the only road Huawei need to take to survived is do an IDM. No FAB using "some" American technology will FAB chip for them. The reward is obvious , the symbolism it creates , the only tech company that dare challenge the might of a superpower that survived and thrived.

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I agree, Huawei should go IDM, not only for itself but to avoid problems to other Chinese IC manufacturers.

US simply cannot let Huawei free, it would be hugely embarrassing and a big image failure for US to accept a prosper Huawei after US went against it directly and aggressively like rarely has been seen before. Superpower vs private company. This is something the superpower cannot afford do lose. So Huawei should think to go all by itself regarding its IC needs, at least for the main or custom IC.

european_guy said:

I agree, Huawei should go IDM, not only for itself but to avoid problems to other Chinese IC manufacturers.

US simply cannot let Huawei free, it would be hugely embarrassing and a big image failure for US to accept a prosper Huawei after US went against it directly and aggressively like rarely has been seen before. Superpower vs private company. This is something the superpower cannot afford do lose. So Huawei should think to go all by itself regarding its IC needs, at least for the main or custom IC.

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@european_guy bro 2020 they build the Wuhan FAB capable of producing 45nm chips, this year the Shanghai FAB will be finished by May (maybe delayed by a month due to the pandemic) as posted by @foofy, 2023 the rumored JV FAB with SMIC in Shenzhen. My thinking is that SMIC FAB in Beijing is dedicated to support the local company and that include Huawei, the FAB is capable of producing 120,000 WPM and can be expanded to 250,000 WPM. Will Huawei stop at 3 FABS? well for me it's enough until SMEE deliver an EUVL, or maybe expanding the existing FAB IF SMEE or CETC deliver an improve iteration the SSA900 22nm DUVL.

Two years ago when the US sanction fell on Huawei, I said/predicted that Huawei will eventually go into IDM, and along with SMIC as the leading fab, lead the Chinese semiconductor industry. The industry needs leaders to channel and integrate the national drive; it's better for private companies to lead than the government.

Even if Ken Hu said Huawei would not get into semiconductor manufacturing, that doesn't mean they will not in the future. Huawei has the track records of changing their minds when the time is right. This happened in smartphone business. They've been back-and-forth on EV too.

But Huawei currently is not in a good position to get into semiconductor manufacturing business. Besides the huge capital required, they also lost their huge smartphone business division. So any hope of becoming an IDM a la Samsung is unrealistic now.

weig2000 said:

But Huawei currently is not in a good position to get into semiconductor manufacturing business. Besides the huge capital required, they also lost their huge smartphone business division. So any hope of becoming an IDM a la Samsung is unrealistic now.

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For Huawei to go IDM, it means to target 28nm at the best (they can't get ASML machines), so definitely will not be the next Samsung, at least for the foreseeable future, and the fact that they have been forced to quit smartphone business is not so critical IMO considering that smartphone chips require state-of-the-art.

The money may not be such a huge problem for them, first because they don't need a high-capacity, state-of-the-art fab, and also because they can easily raise capital, maybe in JV with some local government.

But going IDM it means to close some huge weakness, to revive HiSilicon (this alone is worth the effort) and to look at the future with more confidence. And no, they don't need to make money out of the fab, it would be enough for them to break even (included amortizations) to make it worth.

european_guy said:

For Huawei to go IDM, it means to target 28nm at the best (they can't get ASML machines), so definitely will not be the next Samsung, at least for the foreseeable future, and the fact that they have been forced to quit smartphone business is not so critical IMO considering that smartphone chips require state-of-the-art.

The money may not be such a huge problem for them, first because they don't need a high-capacity, state-of-the-art fab, and also because they can easily raise capital, maybe in JV with some local government.

But going IDM it means to close some huge weakness, to revive HiSilicon (this alone is worth the effort) and to look at the future with more confidence. And no, they don't need to make money out of the fab, it would be enough for them to break even (included amortizations) to make it worth.

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Indeed, going into IDM makes absolute strategic sense for Huawei -- and for Chinese semiconductor industry too -- as no other company in China has the both the scope and scale of the related business, from upstream design (HiSilicon) to downstream product manufacturing.

Of course, if Huawei did get into the semiconductor manufacturing, it wouldn't start with the cutting edge. There were rumors back then that Huawei would start with a 40nm fab to get the feet wet. In the end, they would still need some downstream demand to drive the chip manufacturing. I guess in the end, it was still a bridge too far for them to jump into the water themselves. I think they end up working with partners as VC and have invested in several dozens companies in the ecosystem.

Even if they could only get to 28nm it could be used for the baseband business. The cell phone tower equipment. They also claim to want to be in the automotive sector. Yet they don't seem to think they need to make their own automotive chips? I think they are being too timid here.

Hebei News Network (Hebei Daily reporter Ma Yanming) On April 23, the chip testing and key equipment R&D and production base project invested and constructed by Hebei Shenghao Optoelectronics Technology Co., Ltd. started. The project is located in the high-tech zone of Shijiazhuang City. It is a strategic emerging industry project and has been included in the key construction projects of Hebei Province in 2022. The planned total investment is 430 million yuan and the construction scale is about 44,000 square meters.
Hebei Shenghao Optoelectronics Technology Co., Ltd. was established in 2017. It is a chip back-end processing service-oriented production enterprise, dedicated to the development and manufacture of optical communication chip testing, key equipment and high-end chips. The company has developed and manufactured a variety of equipment such as chip testing machines, dicing machines, slicing machines and other counting machines. The core technologies, key components, software, algorithms, and special material processing techniques have all been independently developed and produced, filling the domestic market. The gap in the field of chip testing broke the international monopoly and truly realized the localization of photoelectric chip testing equipment.
The chip testing and key equipment R&D and production base project is mainly used for optical communication chip testing and key equipment R&D and production. After the project is completed, while optimizing the office environment and expanding the production scale, it will help attract outstanding scientific and technological talents from all over the world, so that scientific and technological achievements can be quickly transformed into productivity, and good economic and social benefits for enterprises and society will be created.

Tuojing Technology: Research Framework

"Tuojing Technology (PIOTECH) (688072): Domestic Thin Film Deposition Equipment Industrialization Pioneer Layout PECVD+ALD+SACVD" released by Founder Securities Research Institute on April 21, 2022. For details, please read the original report, Chen Hang S1220519110008

PECVD+SACVD+ALD, the pioneer of domestic thin film deposition industrialization. The company's core team has the technical background of Nova/Aixtron/ and other major manufacturers, and is the leader of a number of PECVD/ALD/SACVD national special projects. With the support of capital such as Big Fund / China Micro / SDIC, the company is the only domestic manufacturer of industrialized application of PECVD and SACVD equipment, which is irreplaceable.

Customers cover core fabs, and continue to benefit from production expansion and achieve large-scale growth. Looking ahead in 2022, the potential expansion capacity of domestic-funded fabs for 12-inch production is at least 1.55 million wafers per month, supporting a 3-4-year high-prosperity expansion cycle. The company's customers, /Changcun/Huahong/Jinghe/Yuexin/Changxin, cover downstream core fabs, and will continue to benefit from downstream expansion to achieve rapid and large-scale growth in the future.

Trade disputes threaten supply chain security, and domestic substitution is imperative. The global equipment market is dominated by Japanese, European and American suppliers, and the comprehensive self-sufficiency rate of semiconductor equipment in mainland China is very low. Under the background of the game of great powers, it is imminent to ensure the security of the industrial supply chain; under the localization, domestic equipment manufacturers have accumulated a lot and increased their volume at a high speed.

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tokenanalyst said:

Looking ahead in 2022, the potential expansion capacity of domestic-funded fabs for 12-inch production is at least 1.55 million wafers per month, supporting a 3-4-year high-prosperity expansion cycle.

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1.55 million wafers per month of new capacity, just in China is bonkers. That's a huge increase

Wrt to 28nm and potential oversupply, keep in mind that the chip ban and broader geopolitical threats effectively provides some insulation for SMIC because it’s singularly (at least currently) supplying a captive domestic market. Assuming Chinese EVs take off as a major sector this might also shift demand for car chips towards Chinese chipmakers as well, again given the shadow cast by geopolitical security concerns.