Germany Carl Zeiss, heart of Dutch ASML Lithography Equipment.

1) @Hado China isn't the only country that can make medical equipment... wth...

Slowing down 5nm in China could reduce both R&D and impetus to move from 7 to 5nm as those who shift to 5nm are losing a large region of market and profit especially in the post-covid months years, in the mean time hopefully China can do some more catching up.,

2) This will definitely slow China's progress as far as moving down the node sizes... but arguably this will accelerate upstream development, which is the whole point of this anyway... I don't think future efforts should be focused on trying to find ways to access ASML

I was just wondering, China is by far the world's largest importer of semiconductors. And even with the global economic slowdown, China will likely continue to be the largest market. Is it possible for China to incentivise companies like Samsung to make adjustments to avoid the US ban in order to sell chips to Huawei? It would probably take a few years, but it might allow China to have access to the latest chips on the market before designing its own, and greatly reduce the delay to China's technological development.

Chinese Govt will press SMIC to continue supplying Chips to Huawei. The real issue here with SMIC is that it uses ASML Lithography machines and American semiconductor equipment from KLA Tencor, Lam etc. Hopefully they will be allowed to continue production using foreign equipment.

The SMEE 28nm DUV Immersion Lithography equipment will be available in December this year so SMIC will have to get this machine if it wants to produce for Huawei. I believe that SMEE already produces a 40 - 60nm Immersion Litho machine (ASML 38nm) which is an option. Chinese companies can supply all the other Semiconductor equipment like testing, etching, cleaning & packaging from companies like Naura, North & Amec etc.

SMEE is going for a Stockmarket listing & is building a new factory announced recently which will use mainly local semiconductor equipment likely to supply Huawei.

Main issue facing local FABs is that they will have to rip up all the US semiconductor equipment which they now cant use. This will cost a lot of money. Then alot of Capital spending to buy local Semi equipment. This could have short term disruption of production. Government will have to give subsidies.

This is a boost in the arm for local semiconductor equipment makers which were ignored by the large FABs for many years, who prefered to use American equipment. This is a lesson to be learnt.

Hopefully Changchun Institute will release their new 125W EUV machine as soon as possible as this machine is needed urgently by local FABs.

Why do they have to remove existing equipment? There were (probably) no restrictions at the time of sale. Its not like SMEE is trying to sell into the US market

tbh this whole <we've now decided post hoc that you cant use the equipment you bought from us for certain purposes> thing is a bit of a dick move, from the perspective of the semi-con manufacturers

What China should do is publish a policy timeline i.e in 3-5 years, whereby any company who specifically target individual Chinese companies with supply restrictions will automatically mirror the same restrictions to the rest of the Chinese market... (as in you cant choose to sell to XiaoMi but not Huawei, you don't get to pick like that.... >_>) Hopefully a predictable published timeline will set out some incentives to create a destined for China supply chain.

PikeCowboy said:

Why do they have to remove existing equipment? There were (probably) no restrictions at the time of sale. Its not like SMEE is trying to sell into the US market

tbh this whole <we've now decided post hoc that you cant use the equipment you bought from us for certain purposes> thing is a bit of a dick move, from the perspective of the semi-con manufacturers

What China should do is publish a policy timeline i.e in 3-5 years, whereby any company who specifically target individual Chinese companies with supply restrictions will automatically mirror the same restrictions to the rest of the Chinese market... (as in you cant choose to sell to XiaoMi but not Huawei, you don't get to pick like that.... >_>) Hopefully a predictable published timeline will set out some incentives to create a destined for China supply chain.

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Currently the restriction is on FABs & Companies supplying Huawei. Big question is whether SMIC will get sanctioned by US Govt for supplying to Huawei. If US Govt sanctions SMIC then they wont be able to get parts for their foreign equipment.
This is what happened to Fulian Jinhua Semiconductor where US equipment suppliers stopped dealing with them.

The US may extend the ban to all Chinese Fabs. So the best option is to use local equipment.

Absolutely.....China should put certain US Tech Companies on the entity list and sanction them. This will send a strong message that China should not be messed with. Or else the US will continue with its attacks as they know there will be no retaliation.

This US policy is a gift for Chinas Semiconductor equipment industry as local FABs will now buy locally made equipment. Biggest losers will be US and foreign makers like LAM, KLA Tencor etc. Almost 30%-40% of their sales are from China. They basically lose access to the largest semiconductor market in the world.

PikeCowboy said:

Why do they have to remove existing equipment? There were (probably) no restrictions at the time of sale. Its not like SMEE is trying to sell into the US market

tbh this whole <we've now decided post hoc that you cant use the equipment you bought from us for certain purposes> thing is a bit of a dick move, from the perspective of the semi-con manufacturers

What China should do is publish a policy timeline i.e in 3-5 years, whereby any company who specifically target individual Chinese companies with supply restrictions will automatically mirror the same restrictions to the rest of the Chinese market... (as in you cant choose to sell to XiaoMi but not Huawei, you don't get to pick like that.... >_>) Hopefully a predictable published timeline will set out some incentives to create a destined for China supply chain.

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Basically the unreliable list they already threatened.

Hadoren said:

This is impossible. If China prohibits 5nm, the companies will simply manufacture 5nm for the rest of the world and 7nm for China.

Then in a few years there will be 3nm. Does China prohibit 3nm? So China has 7nm while the rest of the world has 3nm?

What about when 2nm/1nm is figured out? It doesn't work that way.

This is why I advocate a medical supply export ban as retaliation for this attack on Huawei. All other measures don't work or are ineffective.

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The rest of world market is really the western market.

5nm parts need to be sold at huge volume to recoup the cost.

Losing the China market may not be enough.

tidalwave said:

The rest of world market is really the western market.

5nm parts need to be sold at huge volume to recoup the cost.

Losing the China market may not be enough.

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It will just get nationalized away and QE infinity... money printer goes BRRRRR

Are The Americans Trying To Steal TSMC Patents to create an American "National Champion"?

Here on out, the terms "The US" will encompass: the United States Government, the ruling elites of the American financial power structure, the military industrial complex and Bannonite race warriors.
In light of the disturbing events these past few days where:

1. The US has moved to ban TSMC from supplying Huawei with chips, whilst extending a 90 day waiver (effectively giving the USG the power to decide whether or not Huawei gets the chips, rather than TSMC).
2. US moving forward with this ban only 12 hours after TSMC agreed to set up a 5nm plant in Arizona, and thereby also making TSMC vulnerable to US pressure on this factory.
3. The US has a history of forcing Asian nations in giving up patents (eg Japan and Toshiba, Plaza Accords)
4. The US via private equity groups recently tried to buy Nokia to create a 5G american competitor.
5. The US has a history of using its military/natsec to steal industrial patents (via Snowden's revelations, Tailored access operations, PRISM, Echelon).
6. The US has banned lithography manufacturers from exporting to China; also, strangely a lithograph machine destined for China was destroyed in an industrial fire in 2019.
7. The US under the current Trump admin is overtly economic nationalist and mercantilist.

I posit that the US is moving to get TSMC to move its fabs/factories to the continental US, whereby the US will create its own national champion and if taiwan changes government to a more friendly government, then the US will simply drop all pretence and destroy TSMC.

Oh no, is this the end of China? Why is US going to such great length to stall the innovation of non-US players merely to keep herself as the relative no. 1. Is maintaining hegemony at the expense of the world justified with any means?

tidalwave said:

Alot of factors at work.
Chinese government needs to step in and let SMIC know to ignore US and continue to produce for huawei. Virus thing helped the delay of 5g deployment as SMIC pseudo 7nm will come out end of end of this year.
Now China government has to actively prevent others from flooding the Chinese market in upcoming years with 5nm
parts as Huawei has no access to this technology.
Blocking Apple, Qualcomm and Mediatek 5nm parts into the Chinese market will potentially make this technology prohibitively expensive.

Possible to make everyone stay at 7nm if 5nm blocked at China market. This gambit could pay off.

China government should implement this actively

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No, blocking all 5nm from the Chinese market will do long-term harm to the Chinese technology industry, because they will lose out to ther global competitors in the global market. It's not possible to stop the shift towards 5nm, because the benefits are clear.

But there little to no downsides to blocking Qualcomm 5nm parts from China because Apple, Samsung, Mediatek have viable alternatives.