Before we celebrate too much at what is indeed a major breakthrough, do keep in mind that bitcoin mining machines don’t have the same requirement as consumer electronics like phones and tablets. At least as of last year it appears that SMIC is using MinerVa as a practice dummy for improving their 7nm recipe.
The significance is twofold IMHO.
1. The Chinese fab a chip that is better than anything the Americans can do.
2. IC inside China expands ruthlessly all the way just one node behind the cutting edge.
3. All this was done under US sanctions, which kind of shows how useless US sanctions really are when it comes to China.
Points 1 and 3 will really rankled those nitwits in Washington DC, if they actually knew what this is all about.
Going forward, it is all about replacing foreign technology (assuming they do not play nice), and it is all about adding capacity.
This will be a slow process.
What does not seem to be a problem, is the know-how.
Let's not be polite here. At 7nm, the Chinese have the same or better know-how on how to make such as chip compared to the Americans. Bitcoin mining is kind of complicated, this is no ordinary chip.
The systems integration for a 7nm chip, the know-how at all points in the system is the key. Now China is just one node away from the cutting edge.
Demonstration of the know-how is the key point, a whole year or two ago, and the political in-your-face message is very important.
What is the point of banning ASML machines to China? Or South Korea joining some chip-pack?
How vicious do they want this fight to be with China?
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What hurt SMIC here, probably was the EDA, as the most advanced design tools were American and not available to them, according to the stories we are told.
My impression is that with this problem, those Chinese guys will come back from America, bringing the know-how, and that will alleviate much of that problem.
Unless Huawei beats them to it.