Chinese semiconductor industry

ansy1968 said:

Bro my opinion, you retaliate you loss, you fall the trap set up by your opponent, to fight back is to strengthen yourself and exhaust your enemy. You see the crack cause America is unfit to fight and those vassal are unwilling to help, so winning by not fighting a Sun Tzu concept every Chinese knew, the power of Chi , we need to build the momentum to overcome any adversary, just like water.

And one more thing, both the Chinese and American are in the same boat as both countries try to onshore as much capability and capacity as possible, on the mature nodes the Chinese had won overwhelming, on the high end it's a close tie, my thesis is based on 2024/2025 timeframe. As the date of Chinese EUVL eventual appearance and TSMC & Samsung American FAB will become operational.

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U.S. companies worry China will retaliate by restricting their firms' access to its vast market. Nonetheless, China has chosen to strengthen support for its national champions. They are: Semiconductor Manufacturing International Corporation (SMIC) in logic chips, Yangtze Memory Technologies Corporation (YMTC) in memory chips, and domestic manufacturers of the latest equipment.

Chinese President Xi Jinping said at the 20th National Congress of the Communist Party of China (CPC) on October 16, "China has also joined the ranks of the world's innovators with breakthroughs in some core technologies in key fields.”

mmbro said:

U.S. companies worry China will retaliate by restricting their firms' access to its vast market. Nonetheless, China has chosen to strengthen support for its national champions. They are: Semiconductor Manufacturing International Corporation (SMIC) in logic chips, Yangtze Memory Technologies Corporation (YMTC) in memory chips, and domestic manufacturers of the latest equipment.

Chinese President Xi Jinping said at the 20th National Congress of the Communist Party of China (CPC) on October 16, "China has also joined the ranks of the world's innovators with breakthroughs in some core technologies in key fields.”

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Well that's the US company problem, either they set up a fully Chinese subsidiary or pack up and go home, what I'm seeing as the Chinese IC sector up their game within 2 years IF they reach parity, the Chinese consumer themselves will retaliate by boycotting anything pertaining to American technology except those made in China. The American should never underestimate the hidden Chinese hubris, as long as their is an import substitute, they will go local. National pride is a virtue that all Chinese aspire for.

One of my proposal is to provide a list of all component use, which country produce it and what percentage is made in China in all consumer products and make it known publicly so every Chinese consumer can discern. In this way there is public pressure for Chinese manufacturer to go local. This proposal is way more effective than gov't retaliation and ban.

China does not need to do any official counter sanctions to America. In reality, they haven't purchased any Boeing aircraft for several years. As I said in the C919 thread, that is killing Boeing. In general, you are probably seeing a natural disengagement from American high tech imports. Whereas in the past they tried to import more from America to address the trading deficit, now they are going to import less in this area.

Also, I do think the American tools makers and chip makers are still overly optimistic about their future sales prospect in China. They are still counting on a share of the local Chinese fab market. But with the scare from the lack of after sale support, they don't even need much gov't encouragement to stay away from American products.

If they really want to, Chinese gov't can just ban AMAT/KLA/Lam from operating in China. That might create more disruptions than needed. So, I think their biggest help to IC industry is just providing money for capex so that they can expand their production. This is clearly happening everywhere across China.

mmbro said:

U.S. companies worry China will retaliate by restricting their firms' access to its vast market. Nonetheless, China has chosen to strengthen support for its national champions. They are: Semiconductor Manufacturing International Corporation (SMIC) in logic chips, Yangtze Memory Technologies Corporation (YMTC) in memory chips, and domestic manufacturers of the latest equipment.

Chinese President Xi Jinping said at the 20th National Congress of the Communist Party of China (CPC) on October 16, "China has also joined the ranks of the world's innovators with breakthroughs in some core technologies in key fields.”

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wtf, I wonder where this guy heard about this from.

Additionally, SMIC has developed its 5 nm chips using locally produced lithographic machines and technologies and plan to build those chips by 2025.

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This is the second time 5nm has been mentioned for SMIC by national press. They must be hearing this somewhere. btw, I've been predicting they will have enough 2050i/2100i to mass produce N+2/N+2 improved process by 2024 (comparable to 4/5 nm with Samsung). SMIC itself has been keeping their Finfet expansion completely silent. If they are actually able to use fully domestic production line to produce 5nm chips by 2025, that would be quite impressive. Arfi scanners will be getting a lot of improvement in the next 18 to 24 months.

olalavn said:

I predict Huawei lithography will be launched under the name SMEE, but that's just my speculation.

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I don't think they need to give it a name. Anything Huawei launches probably will be kept under cover

tphuang said:

China does not need to do any official counter sanctions to America. In reality, they haven't purchased any Boeing aircraft for several years. As I said in the C919 thread, that is killing Boeing. In general, you are probably seeing a natural disengagement from American high tech imports. Whereas in the past they tried to import more from America to address the trading deficit, now they are going to import less in this area.

Also, I do think the American tools makers and chip makers are still overly optimistic about their future sales prospect in China. They are still counting on a share of the local Chinese fab market. But with the scare from the lack of after sale support, they don't even need much gov't encouragement to stay away from American products.

If they really want to, Chinese gov't can just ban AMAT/KLA/Lam from operating in China. That might create more disruptions than needed. So, I think their biggest help to IC industry is just providing money for capex so that they can expand their production. This is clearly happening everywhere across China.


wtf, I wonder where this guy heard about this from.

This is the second time 5nm has been mentioned for SMIC by national press. They must be hearing this somewhere. btw, I've been predicting they will have enough 2050i/2100i to mass produce N+2/N+2 improved process by 2024 (comparable to 4/5 nm with Samsung). SMIC itself has been keeping their Finfet expansion completely silent. If they are actually able to use fully domestic production line to produce 5nm chips by 2025, that would be quite impressive. Arfi scanners will be getting a lot of improvement in the next 18 to 24 months.

I don't think they need to give it a name. Anything Huawei launches probably will be kept under cover

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I talked about SMIC at 5nm in September. You can read it here:

Lincoln Kong -- Goldman Sachs -- Analyst

Thank you, management. I want to ask about our sales of our advanced chips to China because we have seen recently a lot of press report around U.S. chip restriction against China. So, we wonder how you are seeing these restrictions impacting your ability to grow the business by AI Cloud, the autonomous driving, and lastly, wider our AI business.

Could you also remind us our business that the most depending on advanced large AI chips and if there's any way we'll be able to manage this with domestic capability?

Dou Shen -- Executive Vice President and Head of AI Cloud Group

Thank you, Lincoln. Thank you. You're right. This is a hot topic recently, actually.

So, the short answer to your question is that, you know, we think the impact is quite limited in the near future. You know, here are the reasons. So, first of all, you know, as of today, a large portion of our AI Cloud business and even wider AI business does not rely too much on the highly advanced chips. And secondly, you know, for the part of our businesses that need advanced chips, we have already stocked enough in hand, actually, to support our business in the near term.

Certainly, there was some alternative to the restricted chips. And we have the technologies to use these alternatives to achieve or most of the same effectiveness and efficiency in our AI Cloud and wider AI businesses. Last but not least, automotive chips are not on the prohibited list. So, this means that in the near future, in-vehicle computing is not affected.

So, when we look at it at a mid to a longer term, we actually have our own developed AI chip, so named Kunlun. Actually, we already started to use Kunlun chip to support some large-scale AI-computing tasks internally. We also use Kunlun to serve external customers already. So, because we have full stack of AI capabilities from chips to AI frameworks to foundation models and then to application software, so we can achieve much higher efficiency as we optimize the AI tasks from end to end.

So, let me give you some examples. By using our Kunlun chips [Inaudible] in large language models, the efficiency to perform text and image recognition tasks on our AI platform has been improved by 40% and the total cost has been reduced by 20% to 30%. There are more cases like this in quality inspection in our smart manufacturing projects and image recognition in the smart city products and so forth. So, as our business grows, we believe our end-to-end capabilities will gain us even stronger competitive advantages.

For the core chips, so we expect to see more auto parts, including core chips, to be manufactured in China in the future. So, as China's intelligent driving market continues to develop rapidly. So, this means that supply chain in auto industry may become more and more independent and less rely on the imports. So, once again, I want to emphasize that Baidu has built a very strong R&D team.

We keep introducing cutting-edge technologies to the market. And we have users and customers to use these technologies to improve efficiency. So, that's why we believe we can leverage our strong AI capabilities and algorithms to support the top-level computing, even though we faced some turbulence in the semiconductor supply change. So, to sum up, chips sales restriction should have a limited impact on our business operations in the near term.

Instead, we think it creates some good market opportunities for the Chinese chip companies. And our Kunlun AI chips and our AI business will eventually benefit from these opportunities.

tokenanalyst said:

For the core chips, so we expect to see more auto parts, including core chips, to be manufactured in China in the future. So, as China's intelligent driving market continues to develop rapidly. So, this means that supply chain in auto industry may become more and more independent and less rely on the imports. So, once again, I want to emphasize that Baidu has built a very strong R&D team.

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Thanks bro, again highlighting what @Oldschool had said, the battle ground for China are auto and industrial chips! not 3nm chips the US can have it with the glory it implies....lol

tinrobert said:

I talked about SMIC at 5nm in September. You can read it here:

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Thank you again. I was wondering if you would know this. Back when TSMC was first able to make 7nm chips without EUV scanners, how high was the yield?

I'm asking that to try to get an idea of how high SMIC can get their N+1 and then N+2 yield, since the former is like a less advanced process and the latter is likely a more advanced process. And the scanners they have with 2050i/2100i should be better than what TSMC had access to. I'd imagine 7nm and 5nm chips made without EUV will just have lower yield even if they can start mass producing them.

tokenanalyst said:

So, when we look at it at a mid to a longer term, we actually have our own developed AI chip, so named Kunlun. Actually, we already started to use Kunlun chip to support some large-scale AI-computing tasks internally. We also use Kunlun to serve external customers already. So, because we have full stack of AI capabilities from chips to AI frameworks to foundation models and then to application software, so we can achieve much higher efficiency as we optimize the AI tasks from end to end.

So, let me give you some examples. By using our Kunlun chips [Inaudible] in large language models, the efficiency to perform text and image recognition tasks on our AI platform has been improved by 40% and the total cost has been reduced by 20% to 30%. There are more cases like this in quality inspection in our smart manufacturing projects and image recognition in the smart city products and so forth. So, as our business grows, we believe our end-to-end capabilities will gain us even stronger competitive advantages.

For the core chips, so we expect to see more auto parts, including core chips, to be manufactured in China in the future. So, as China's intelligent driving market continues to develop rapidly. So, this means that supply chain in auto industry may become more and more independent and less rely on the imports. So, once again, I want to emphasize that Baidu has built a very strong R&D team.

We keep introducing cutting-edge technologies to the market. And we have users and customers to use these technologies to improve efficiency. So, that's why we believe we can leverage our strong AI capabilities and algorithms to support the top-level computing, even though we faced some turbulence in the semiconductor supply change. So, to sum up, chips sales restriction should have a limited impact on our business operations in the near term.

Instead, we think it creates some good market opportunities for the Chinese chip companies. And our Kunlun AI chips and our AI business will eventually benefit from these opportunities.

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Thanks for posting this. I just saw snippets of this on twitter the other day. I've been talking about Kunlun chips for a while now. It's not good enough to be sanctioned, so production should not be an issue. But it is good enough to really make a difference. The big question for Baidu is Kunlun-3. If they stay with Samsung, they can probably get it mass produced with higher yield and such, but will have to be designed in a way to avoid sanctions. If they work with SMIC, they don't have to worry about sanctions, but will probably have to deal with higher cost from lower yield production. That's a dilemma facing all the Chinese chip makers. My guess is that they will do one with SMIC and one with Samsung.

ansy1968 said:

Thanks bro, again highlighting what @Oldschool had said, the battle ground for China are auto and industrial chips! not 3nm chips the US can have it with the glory it implies....lol

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hmm, that is the wrong way to look at things. You shouldn't have to chose. China is large enough to try both. In the next 3 years, they should have enough capacity coming online for all the domestic auto/industrial/consumer electronics needs. At the same time, they will also need to have enough 7/5 nm capacity to cover HPC, desktop CPU and auto CPU needs.

SMIC does not need to spend $6.6 billion in capex a year just to add 50k wpm of 45 to 90 nm segment. Huahong manages to do that with just a little over $1 billion in capex. SMIC's capex implies a lot of capex on higher cost equipment for more advanced nodes.

tphuang said:

hmm, that is the wrong way to look at things. You shouldn't have to chose. China is large enough to try both. In the next 3 years, they should have enough capacity coming online for all the domestic auto/industrial/consumer electronics needs. At the same time, they will also need to have enough 7/5 nm capacity to cover HPC, desktop CPU and auto CPU needs.

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I'm with you sir, I just saying in this competition the US are playing chess while the Chinese are playing GO. So what effectiveness did all those move to checkmate China, All I'm seeing is a lot of red in the checker board.

Saw this on weibo somewhere. No idea how credible this is.

国产EUV也开始组装。长光所的进度会快些，上光所要三年后推出样机。

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I assume 上光所 might be working with SMEE here for the prototype. I can believe that it might take another 3 years for them if LPP light source only recently became good enough.

It seems very China to have 2 competing firms working toward the same goal and see who gets there sooner. Not too different from SMEE, CETC and Huawei all doing Arfi scanners. If 长光所(CIOMP) can get a prototype out in 2 years, it would beat all my expectations.

From this link
Looks like this is the new company that was formed to just work on EUV?

@olalavn @WTAN Sir, since SMEE SSA800 28nm DUVL theoretically can do 7nm using multi patterning (TSMC first gen 7nm was done using NXT 1980i) and Nata Optic had the Photoresist material needed to produce the chip, then we can assume an indigenous 7nm line is a possibility next year?

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