Chinese semiconductor industry

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Weaasel

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mst said:
Will China retaliate against Japan? Ban rare earth materials?
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I believe that China will retaliate against Japan in some way. As much as the rare earths card is often suggested as a means of retaliation, China has actually been very cautious in using it. I doubt that China will do so.

The best retaliation against Japan will come in the future when after China has made much improvement with regards to semiconductor and IC tech and is very comparable in all categories to that of the US, Japan, the Dutch, and other EU countries, Japanese companies will be completely frozen out of the market share for high tech products in China.
 
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Weaasel

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tphuang said:
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Korean IC industry now have 900 billion RMB of semiconductor stored up and not delivered. China represents Korean IC industries's main export market, 60% in fact. So, it's a huge problem for Korea that China is needing to import less chips.

I do wonder about some of these optimistic statements about semi industry turning around the inventory backlog reducing by second half of 2023. Is the economy getting any better? What is that based on? Sure, there is non stop demand in China for domestic tools and chips due to sanction fears. But for companies that exported into China, they already have a huge backlog that need to be cleared up and the market size is shrinking by the day for them. Where else is this market opening up for them?
And for all of them that have been using China sales to reinvest into R&D and new projects, where is that funding going to come from now?
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In Seoul's interests it has to continue gradually reducing the extent of its economy's reliance on exports. In 2011 they comprised 51% of their GDP, and in 2021 it was 37%. It has to undergo some paradigm shift somehow by finding ways via which to continue to increase domestic consumption, while improving incomes and maintaining affordability. I will digress a little more to say that South Korea is one of the countries that needs to go much reduced material scarcity through as fast as possible a complete shift away from fossil economy to one of nuclear power and renewables, which when the infrastructure is firmly in place and dominant will result in much reduced production and distribution costs of the global economy and hence reduced scarcity due to the combination of in varying ways of extreme abundance and/or efficiency which fossil fuels patently lack. China is firmly on that path.
 
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bzhong05

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tphuang said:
View attachment 106032
btw this is now going around Chinese social media and causing people to get alarmed which is also trigger articles like this
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Based on what can decipher from what people have been saying, the troubles at YMTC are real and they are suffering from not just losing access support for the American tools they bought but also losing orders like the apple one. When you ramp up production with the expectation of certain order, it stinks when the orders are not there. If we factor in the current market downturn in memory chip prices, YMTC is definitely have a hard time here.

There is definitely rumors of people leaving YMTC due to the tough circumstances. My sense is that the second fab is definitely not starting production anytime soon. But they do need to find customers to pay for first fab.

The other sentence here is too dramatic. The Chinese gov't will not let YMTC go bankrupt.
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This screenshot comes from an anonymous Zhihu.com answer…. My intuition is that these comments should be taken with a grain of salt. The problems are real but anything coming out of Zhihu has the potential to be exaggerated or obfuscated. I have attached the original link for examination (and critique):

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K

KYli

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Weaasel said:
In Seoul's interests it has to continue gradually reducing the extent of its economy's reliance on exports. In 2011 they comprised 51% of their GDP, and in 2021 it was 37%. It has to undergo some paradigm shift somehow by finding ways via which to continue to increase domestic consumption, while improving incomes and maintaining affordability. I will digress a little more to say that South Korea is one of the countries that needs to go much reduced material scarcity through as fast as possible a complete shift away from fossil economy to one of nuclear power and renewables, which when the infrastructure is firmly in place and dominant will result in much reduced production and distribution costs of the global economy and hence reduced scarcity due to the combination of in varying ways of extreme abundance and/or efficiency which fossil fuels patently lack. China is firmly on that path.
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By reducing the reliance upon export but increase the reliance upon the debt fueled consumption isn't sustainable. I would argue that it is even more destructive in turn of realigning the economy to a more sustaining footing. Unlike China and Japan, average South Koreans have high personal and credit debts.

South Korea isn't rich in coal, gas or oil. Nuclear power already plays a vital role for its power consumption. Its solar and wind powers wouldn't be enough to make a dent on its reliance upon fossil fuel. Its agriculture industry isn't competitive and rely upon subsidies and import restrictions and even that food needs to import.

So SK is and will be export powerhouse if it wanted to enjoy better living standards. Any attempt to reorient to domestic consumption to fuel growth would put enormous pressure on its population and not sustainable.

Therefore, SK failures to prevent its semiconductor industry from moving to the US would be a costly for SK. In many ways, both Taiwan and South Korea are in for a ride as their most important Semiconductor industry and a major employment for their population would be forced to move to the US.
 
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Hadoren

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Here are my four ideas for retaliation on Japan, in order of damage.

1. Ban all Japanese flights from transiting through Chinese airspace.

With the corresponding Russia ban on European flights, this is really devastating.

Japanese travel to Europe becomes truly grueling. After some research, I believe that, if you want to avoid Russian or Chinese airspace, the best way is across the Pacific, through the United States. I think you need ~22 hours for that Japanese person to take their dream vacation in Paris.

This probably also wipes out most business trips to/from Europe. No businessman is going to do a 22-hour trip unless absolutely necessary.

As a cherry on top, this adds several hours to Japanese trips to Thailand.

Even better, this slightly discourages Chinese tourism to Japan, helping China's current account balance and increasing Chinese soft power in Japan.

2. Ban Japanese carmakers from selling in China.

Now that NEV's are the future, this just forwards the inevitable by several years.

3. Rare earths ban.

I'm skeptical this will work, given all the time and preparation done for this by Western countries.

4. Ban Japanese tourists from visiting Hong Kong and Macau.

Hong Kong is less attractive than before, but some Japanese are still interested.

They should still be able to visit the mainland because a lot of business is done by people using tourist visas (and Japanese people don't go to the mainland for tourism anyways).
 
olalavn

olalavn

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Registered Member
Hadoren said:
Here are my four ideas for retaliation on Japan, in order of damage.

1. Ban all Japanese flights from transiting through Chinese airspace.

With the corresponding Russia ban on European flights, this is really devastating.

Japanese travel to Europe becomes truly grueling. After some research, I believe that, if you want to avoid Russian or Chinese airspace, the best way is across the Pacific, through the United States. I think you need ~22 hours for that Japanese person to take their dream vacation in Paris.

This probably also wipes out most business trips to/from Europe. No businessman is going to do a 22-hour trip unless absolutely necessary.

As a cherry on top, this adds several hours to Japanese trips to Thailand.

Even better, this slightly discourages Chinese tourism to Japan, helping China's current account balance and increasing Chinese soft power in Japan.

2. Ban Japanese carmakers from selling in China.

Now that NEV's are the future, this just forwards the inevitable by several years.

3. Rare earths ban.

I'm skeptical this will work, given all the time and preparation done for this by Western countries.

4. Ban Japanese tourists from visiting Hong Kong and Macau.

Hong Kong is less attractive than before, but some Japanese are still interested.

They should still be able to visit the mainland because a lot of business is done by people using tourist visas (and Japanese people don't go to the mainland for tourism anyways).
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1/ China only allows Japanese study abroad or business to China... they ban tourist flights....

2/ it is falling to a record low... no need to ban

3/ Rare earths are everywhere... the important thing is the rare earth production technology... China is holding it..
 
O

Overbom

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Japan doesn't need to be intentionally punished. The invisible hand of the market (BYD/EVs) is already doing this. Japan's auto industry is going to fall to the abyss, and then with this semiconductor deal, their IC industry is also going to be severely damaged.

Japan is going down the drain, better not waste any more oxygen and sweat on these guys
 
FairAndUnbiased

FairAndUnbiased

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tphuang said:
I mean the issue for American tools is that they are not getting serviced at all. So, having stocked up more of them helps, but they can only replace the older machines that are breaking down.

As long as ASML and TEL service their products, the strategy of stocking up extra tools work. Since YMTC depends so much on Lam and KLA, not have service support for their products really hurt. As long as the Europeans & Japanese don't stop after service support, they will have no issue staying in the Chinese market. As we saw in the other chart, Chinese IC industry buys a lot from TEL. So, what the Japanese agree to is important too. I don't think we will find out for a while what these things are.

I would assume that ASML has an idea of what type of sanctions are coming and it said in the earnings call that it does not affect any change in its China revenue projection this year, which tells me 3 things
1) they will continue to service lithography machines they already delivered (so their service revenue doesn't decline)
2) they expect some kind of grace period for deliveries of DUVi machines which will last for a few months
3) and/or only the newest DUVi like 2000 to 2100i are limited and SMIC has already stocked up on enough of them

I assume that Dutch & Japanese will agree to similar level of restrictions.
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The wear components of an etch chamber are the chamber coating, heater surface and exhaust plumbing. Those are parts in contact with corrosive etch atmosphere. These are mechanical components that can be replaced by 3rd party maintenance suppliers.

You can buy brand new AMAT Centura 200 mm chambers from 3rd parties. Centura came out in 1992. Right now YMTC should be talking with 3rd party maintenance companies and integrators like NAURA, to basically reverse engineer the Lam tools and source drop in replacements for the wear parts. By should I mean, they're in the process of doing, as they already did a supply chain risk audit 2 years ago.
 
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Overbom

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Update:
Deal has been reached
No public announcement for now. Implementation could take "months" (grace period?)
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Biden Wins Deal With Netherlands, Japan on China Chip Export Limit​

  • Deal comes Friday after two days of talks in Washington
  • Netherlands to ban sales of some immersion lithography gear
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President Joe Biden’s administration secured an agreement with the Netherlands and Japan to restrict exports of some advanced chipmaking machinery to China in talks that concluded Friday in Washington, according to people familiar with the matter.
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The agreement, aimed at undercutting Beijing’s ambitions to build its own domestic chip capabilities, would extend some export controls the US adopted in October to companies based in the two allied nations, including ASML Holding NV, Nikon Corp. and Tokyo Electron Ltd.
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There is no plan for a public announcement of the restrictions, and actual implementation could take months as the two countries finalize legal arrangements, people familiar with the matter said.
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The Netherlands will prevent ASML from selling to China at least some immersion lithography machines, the most advanced kind of gear in the company’s deep ultraviolet lithography line. The equipment is crucial to making cutting-edge chips. Japan will set similar limits on Nikon.
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