As expected，SMIC didn't release any information regarding technical progress
Chinese semiconductor industry
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As expected，SMIC didn't release any information regarding technical progress
The auto chip expansion continues.
Intelligence Power System( ) which is a JV between CRRC and Dongfeng will be spending 280 million RMB on stage 2. Stage 1 continues to be improved with 2 new lines of automotive grade IGBTs. Stage one started in July 2021 and can reach 300k modules a year (1000 to 1200 a day)
Intelligence Power System( ) which is a JV between CRRC and Dongfeng will be spending 280 million RMB on stage 2. Stage 1 continues to be improved with 2 new lines of automotive grade IGBTs. Stage one started in July 2021 and can reach 300k modules a year (1000 to 1200 a day)
EUV tooling research in China.
China EUV lithography tool from 250nm in 2001 to 32nm in 2017, even if pattern 10WPH is still many times faster than EBeam lithography.
CIOMP EUV projection objective.
CIOMP EUV optics and EUV multilayer projection mirror, 50 picometer RMS.
China EUV lithography tool from 250nm in 2001 to 32nm in 2017, even if pattern 10WPH is still many times faster than EBeam lithography.
CIOMP EUV projection objective.
CIOMP EUV optics and EUV multilayer projection mirror, 50 picometer RMS.
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This quote from German Economy Minister Robert Habeck basically sums it all up.
The decision was not about economic, technological, or security concerns. It was pure political posturing.
We have really to read between the lines here.
China accounts for 70%, US share has been reduced to 20% and probably is going to shrink further if we have to interpret lines like:
"need for some customers to buffer time to interpret the new US export control regulations" which I translate like: we had some order cancelled from US customers.
and
"Due to the decline in external demand, some internal factories have undergone annual repairs" which I translate like: we took advantage of canceled US orders to do some maintenance work and setup the lines for the future new Chinese orders that will replace the US ones that are gone.
This line is very important: "the company's full-year revenue is expected to be around $7.3 billion, a year-on-year increase of about 34%,"
This is an official statement that current production has not been severely affected by US firms technicians that ran away abruptly, otherwise they would not foresee a full production Q4.
IMO Scholz just wants to keep everyone happy: he went to China and it was very important visit. Now does this to calm down the pissed US....and also some US lobbyist inside the government, like foreign minister Annalena Baerbock, who, for some (unknown) reason, seems to be very pro-US.
I agree with what you are saying here. Imo the most important part of the guidance
A few more really useful part to think about from other people deciphering the report.
Should be pretty obvious what's going on here. They are massively increasing Capex spend. If we assume that this decision was made recently, since they made no mention of this in Q2 earnings call back in August, then this most likely happened in September or October as they caught wind of the new sanctions. If they spend $5 billion in Capex, then quarterly Capex is $1.25 billion. Adding $1.6 billion to that means they are more than doubling their Capex in Q4. Yes, I think this means accelerated deliveries from ASML and possibly Japanese tool makers. But more likely, this is mostly going in ASML direction. They don't need to stock up domestic tools. It's possible they are giving ASML some additional money to take deliveries early as other chipmakers like TSMC/Samsung cut back on their 2023 Capex. I expect ASML to be getting a large portion of their revenue from China market in Q4 and Q1. We will see.
But in a broad level, it's good to see they are increasing rather than cutting back on Capex. And also that US sanctions have not prevented SMIC from buying more tools. Typically, SMIC JVs (with different local gov't) get a lot of funding from government. So, it's quite possible the increase in Capex is even more than $1.6 billion for Q4 when including what government funding.
Aside from that, we know that
so their 8-inch equivalent capacity in Q3 went up by 32k wpm.
From Q2 earnings report
They spent $2.5 billion in Capex and added 8-inch equivalent capacity by 53k wpm in first 6 months.
So, their capacity expansion has increased in Q3 compared to first half of the year. I think they are going to suffer some short term pain from demand reduction and US customers cutting back, but overall outlook is quite bright.
I do think that some of the lower capacity utilization could be due to American tools not getting serviced. It might take them some time to get those replaced or finding ways to get them serviced and such.
Yeah, I'm fine with this. I think China cannot expect a German coalition with Green Party Atlantist to be too friendly. If they want to have work with Germany/Europe on new techs, they should consider opening up fabs there. It will shut up some people that think China is just there to take over German factories while not investing in Germany.
The green party is basically a CIA hack. They are willing to destroy Germany's economy for America's interests. Look at how they opposed nuclear in germany which would have made Germany more energy independent despite calling themselves the "environmental party". At a massive cost of 20 billion euros too. The fact that they got into power is a failure of german politics.
Though the silver lining is that the FDP/Scholz has a bit of historical socialist tendencies. Nobody knows whether they're secretly planning to improve ties with China.
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No, but we found quite a few interesting details as I outlined.
tomorrow could be a big day. 11/11 is a big sales day in China. Moore threads is going to releasing the pricing on its new GPUs on JD.com. Aside from that, we are anticipating a new CPU to come out this week and 11/11 seems like the most appropriate day for it. That actually would give us an idea of SMIC progress. Also, I think tomorrow might be the day when YMTC releases pricing on its new 232 layer NAND flash.
Also, we found out that Huahong had a good quarter and continues to expand like mad with no end in sight. This came out with their earnings release
Their current round of fab expansion in Wuxi Fab 7 is going as planned. 55% of machines have been installed and they are going to reach their goal (of 95k 12-inch wpm based on previous reporting) by Q2 of next year.
The fact that Huahong did not mention any increased Capex tells me that they can buy everything locally and are not needing to rush through orders. That's not too surprising since most of their capacity increases are with 55 to 90 nm industrial/auto chips.
I'm looking forward to more earnings call/Q&A from SMIC and Huahong.
Lastly, I must say that Chinese Internet is just full of nonsense. Chinese people are literally trying to destroying their own domestic companies with rumors like this
domestic tool makers have to come out and say that SMIC has not stopped purchasing domestic tools. Mature production line keep procuring new equipments. New production line needs some work.
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