Chinese semiconductor industry
- Thread starter Hendrik_2000
- Start date
- Status
Man, business is brutal. You are dealing with basically hyenas that want to eat that market share alive at the second they have an opportunity.
.
.
I'm referring to doing it all under 1 roof and still remain at the leading edge. I have no doubt China will have a fully domestic semicon supply chain that will be the most cost competitive in the world by 2026-2028, for DUV processes. The question is more whether American hawks are right about China getting stuck at EUV. Despite all the circumstantial evidence, China might be using only DUV into the 2030s. If this happens, the American led semicon partners will be able to consolidate their control of many global high tech industries and will very likely institute trade blocs that permanently codify discriminatory trade policies against China and any cooperating countries that side with China. This would prevent China from realizing the profits needed for the R&D to keep up with American led semicon partner countries. It would have the same effect as if the Airbus/Boeing global duopoly codified their cartel by making it illegal to certify any potential competitors from gaining FAA and EASA certification. It's not that China can't do it. It's about the intentions of the American policy makers and what they are trying to achieve. I suspect they might be thinking this, but either way, their policy will be a very dramatic and I believe a very ugly failure.
I'm not so sure they were only 5 years behind, but I'm quite sure if the Warsaw Pact survived until today, they would be a full 20+ years behind by now. Without the generated profits needed for investment heavy R&D + onerous capital expenses, there is no way anybody can compete. This is doubly true for large high tech integration projects like leading edge lithography machines, widebody aircraft, aircraft carriers, space stations, cruiseships, etc. Just saying that China has a tough road ahead even though I believe they will succeed.
Guess the context we need is this process now restricted for AMAT or not really
I guess is not restricted, but you want to risk it?
Not sure how accurate this is, but this is apparently a Q&A with a Lam employee that served YMTC and CXMT
There are a few important things he talked about:
- No support from Lam is available for Chinese fabs after October 12th
- All staff have to withdraw and cannot further assist local Chinese fabs. They can't offer replacement or servicing. Which brings up the point that employees from Lam and others are likely to be let go and join local companies. For example, Lam has several hundreds employees helping YMTC.
- So even though Lam can't service YMTC/CXMT anymore, their ex-employees can be hired to do that job. However, updates and spared will not be possible.
- Seems like even for equipment that does not hit the threshold, you'd need to sign an agreement that those equipment will not be used to assist military or other strategic areas. There is no way SMIC/YMTC/CXMT would sign those agreement. Seems to me that Lam is completely finished in China
- I think this guy is a little inconsistent. They asked him if SMSC (basically the SN1/SN2 fab) had Lam employees even though they couldn't get any 14nm or below technology before. He said even though it products 7 nm and 14 nm chips, SMSC fab somehow still had a few Lam employees. well, I guess that confirms people in the industry knows that SMIC is producing 7 nm chips and that it doesn't use American tools (for the most part)
- Really pessimistic about US citizens. Green card holders are not effected, but citizens are. They have to either give up their citizenship or their career. I think this is an important one. I don't think the heads of these companies will give up their company, but maybe a few of the lower level people will.
- Said no Americans can help Chinese firms from anywhere. lol, okay, i think this guy is a little more emotional here, but I'm sure some of these guys are calling their lawyers right now for advice.
- Asked about how Fujian Jinhua started production again. He just said they got some machines before the ban and some second hand tools after. Refuses to admit that Fujian Jinhua just bought Chinese made tools.
- Said that Fujian Jinhua was able to get parts and spares from Korea and Taiwan, not everything for those machines are produced in America. Again, this guy is intentionally been difficult imo. First he says that YMTC/CXMT might have trouble with spares/parts for their existing production line down the road, but then he says Fujian Jinhua was able to get them.
- Then he says CXMT's biggest trouble is that expansion might be hard in the short term. First, he said that it is hard to replace all the American parts. Then, he said ICRD Jiading was able to be all domestic, but then says ICRD line hasn't reached mass production.
- Says that ICRD has 2 production lines: 1 fully Chinese and the other is western.
- Then he thinks ASML is a problem, but then admits that if a non-American machine contains only 10 to 20% American parts, then it cannot be prevented from being sold to China.
So, it seems to me that he was overall quite defensive about the entire thing and thinks it will hit Chinese fab expansion (not existing production). He freely admits that China can replace a lot of the Lam products, but refuses to admit that AMEC can replace everything Lam produces.
It seems to me there are a few obvious outcomes here:
1) Chinese tools makers need to expand their production quickly. There is so much demand
2) Lam/KLA/AMAT are done in the Chinese market. They will be letting go of many people and that will help their Chinese competitors. At minimum, there are skilled technicians that have worked in this industry that can service NAURA/AMEC machines. I'm sure there are engineering talents too.
3) US passport holders will have a hard decision to make. This is where Chinese gov't really needs to step up. They need to grant these people expedient citizenship and allow dual citizenship I think. A lot of these guys want to have their family in Western countries. Even if they give up their US citizenship, they will still want to have their family in Canada, Australia or Singapore or somewhere else.
4) Looks like the precious SMIC and HLMC have found a way to expand their production without American tools. I see no reason why China cannot further ramp up their advanced node production.
There are a few important things he talked about:
- No support from Lam is available for Chinese fabs after October 12th
- All staff have to withdraw and cannot further assist local Chinese fabs. They can't offer replacement or servicing. Which brings up the point that employees from Lam and others are likely to be let go and join local companies. For example, Lam has several hundreds employees helping YMTC.
- So even though Lam can't service YMTC/CXMT anymore, their ex-employees can be hired to do that job. However, updates and spared will not be possible.
- Seems like even for equipment that does not hit the threshold, you'd need to sign an agreement that those equipment will not be used to assist military or other strategic areas. There is no way SMIC/YMTC/CXMT would sign those agreement. Seems to me that Lam is completely finished in China
- I think this guy is a little inconsistent. They asked him if SMSC (basically the SN1/SN2 fab) had Lam employees even though they couldn't get any 14nm or below technology before. He said even though it products 7 nm and 14 nm chips, SMSC fab somehow still had a few Lam employees. well, I guess that confirms people in the industry knows that SMIC is producing 7 nm chips and that it doesn't use American tools (for the most part)
- Really pessimistic about US citizens. Green card holders are not effected, but citizens are. They have to either give up their citizenship or their career. I think this is an important one. I don't think the heads of these companies will give up their company, but maybe a few of the lower level people will.
- Said no Americans can help Chinese firms from anywhere. lol, okay, i think this guy is a little more emotional here, but I'm sure some of these guys are calling their lawyers right now for advice.
- Asked about how Fujian Jinhua started production again. He just said they got some machines before the ban and some second hand tools after. Refuses to admit that Fujian Jinhua just bought Chinese made tools.
- Said that Fujian Jinhua was able to get parts and spares from Korea and Taiwan, not everything for those machines are produced in America. Again, this guy is intentionally been difficult imo. First he says that YMTC/CXMT might have trouble with spares/parts for their existing production line down the road, but then he says Fujian Jinhua was able to get them.
- Then he says CXMT's biggest trouble is that expansion might be hard in the short term. First, he said that it is hard to replace all the American parts. Then, he said ICRD Jiading was able to be all domestic, but then says ICRD line hasn't reached mass production.
- Says that ICRD has 2 production lines: 1 fully Chinese and the other is western.
- Then he thinks ASML is a problem, but then admits that if a non-American machine contains only 10 to 20% American parts, then it cannot be prevented from being sold to China.
So, it seems to me that he was overall quite defensive about the entire thing and thinks it will hit Chinese fab expansion (not existing production). He freely admits that China can replace a lot of the Lam products, but refuses to admit that AMEC can replace everything Lam produces.
It seems to me there are a few obvious outcomes here:
1) Chinese tools makers need to expand their production quickly. There is so much demand
2) Lam/KLA/AMAT are done in the Chinese market. They will be letting go of many people and that will help their Chinese competitors. At minimum, there are skilled technicians that have worked in this industry that can service NAURA/AMEC machines. I'm sure there are engineering talents too.
3) US passport holders will have a hard decision to make. This is where Chinese gov't really needs to step up. They need to grant these people expedient citizenship and allow dual citizenship I think. A lot of these guys want to have their family in Western countries. Even if they give up their US citizenship, they will still want to have their family in Canada, Australia or Singapore or somewhere else.
4) Looks like the precious SMIC and HLMC have found a way to expand their production without American tools. I see no reason why China cannot further ramp up their advanced node production.
Not surprising. The same thing happened to Fujian Jinhua.
I would not be surprised if there were 3rd party companies which would take up that task. The Chinese government needs to put in place laws so these companies can reverse engineer parts and software to service the Lam machines Chinese factories bought and paid for.
A lot of Chinese companies not in the list will continue to buy Lam products until Chinese products ramp up I think.
There is a fab huge ramp up in progress in China right now and the sanctioned companies are only a part of that even if a significant part.
I doubt there are no replacements for a lot of these tools made by TEL or someone else. TEL still can sell to Fujian Jinhua I think.
Makes sense that the Koreans and Taiwanese have their own way to get spares, after Korea got hit with the Japanese export ban on certain materials some years ago they probably want to at least have their materials supply. And a lot of people might not know about this, but Taiwan does have its own machine tools industry. So I doubt they could not make simple parts on their own if they wanted to.
ICRD is not intended to be a production facility. It is basically a research lab. It is basically the Chinese equivalent of IMEC from what I understand. As for CXMT they should have taken into consideration after Fujian Jinhua that the same thing might happen to them.
Nah. That is overly optimistic. The US also had a 10 to 20% criteria on exports to UAC at one point for the MC-21, then they changed the criteria so that if something has any US component in it, even if it is a single screw, it cannot be sold to UAC. The fact is the US can change the criteria any way they want. The only way out is to exclude them from the production chain.
It is worse than that. Chinese tool makers need more tool production, more products for more categories, and they need to make the products they produce competitive in terms of production rate. All at the same time.
I think the US jumped the gun by putting these sanctions into place before they could get the other players to agree on the CHIPS4 meeting to make their own sanctions. If Japan balks out of the sanctions companies like AMAT and Lam are toast I think. But Japan is basically a US colony so I doubt they won't cave in.
btw, here is a summary of the Americans working in high positions in Chinese semiconductor industry.
The most famous of which is Gerald Yin (尹志尧), the CEO of AMEC. I don't see how most of these guys are willing to give up their company/leadership positions that they've worked so many years for.
Anyhow, I tend to think this is a small price to pay for all the ex-Lam/AMAT/KLA employees that will now be free to join their Chinese competitors. After all, ramping up production requires hiring/training more people as well as increasing factory space.
The most famous of which is Gerald Yin (尹志尧), the CEO of AMEC. I don't see how most of these guys are willing to give up their company/leadership positions that they've worked so many years for.
Anyhow, I tend to think this is a small price to pay for all the ex-Lam/AMAT/KLA employees that will now be free to join their Chinese competitors. After all, ramping up production requires hiring/training more people as well as increasing factory space.
News that ICRD now has a 100% domestic line pretty big deal no …
We already knew that. The question is what production rate does it have, yield, and how easily can it be replicated elsewhere.
- Status