(Bloomberg) — The U.S. will look to Chinese companies like Semiconductor Manufacturing International Corp., according to one of the semiconductor industry’s leading figures. and Huawei Technologies Co. cannot stop them from making advances in chip technology.
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SMIC and Huawei, which stunned Washington by unveiling a Chinese-made phone processor, can use existing older machines to make even more sophisticated silicon, said Burn J. Lin, a former vice president at Taiwan Semiconductor Manufacturing Co. SMIC should be able to to advance to the next 5-nanometer generation using machines from ASML Holding NV, which it already operates, said Lin, who championed the lithography technology at TSMC that revolutionized chip manufacturing.
Huawei electrified the chip industry when it introduced a 7nm processor from SMIC in the Mate 60 Pro, sparking cheers in China and accusations in the United States that a campaign to curb the country’s technological rise had failed. And Yangtze Memory Technologies Co. now also produces some of the most advanced memory chips in the industry. In October, the Biden administration tightened existing restrictions to close loopholes that could potentially allow the country to access advanced American equipment. This marked a new phase in the struggle to influence technologies critical to economic and political balance.
Read more: Huawei’s surprising comeback marks a new phase in the tech cold war
But that may not stop China’s technological rise, said Lin, who is highly regarded in the industry for being the first to propose immersion lithography, the technology on which ASML’s core products are based.
SMIC used ASML’s immersion lithography machines to produce the 7nm chip for Huawei. Beyond trying to reach the 5nm milestone, it is likely that China will experiment with new materials or advanced chip packaging to produce more powerful semiconductors, Lin said. SMIC shares rose as much as 5.8% in Hong Kong, their biggest gain in about two weeks.
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“It is simply not possible for the U.S. to completely prevent China from improving its chip technology,” Lin said in an interview this week at National Tsing Hua University in Hsinchu, where he serves as dean of the semiconductor research school. This echoed comments made by Arm Holdings Plc chief executive Rene Haas this month.
“What the US should really do is focus on maintaining its leadership in chip design rather than trying to limit China’s progress, which is futile as China pursues a nationwide strategy to boost its chip industry and is hurting the global economy Lin added.
In fact, the US may have inadvertently given SMIC a golden opportunity, he argued.
In 2020, Washington banned TSMC – supplier of the world’s most advanced silicon to Apple Inc. and Nvidia Corp. – effectively doing business with Huawei. At that point, SMIC took on the huge orders that helped it improve its manufacturing technology, Lin said. Representatives for SMIC and YMTC did not respond to requests for comment.
A debate is currently raging in the United States and beyond about whether Washington and its allies should step up their containment campaign against China. US Commerce Secretary Gina Raimondo said Washington had no evidence that China could produce advanced chips “at scale”. But Assistant Secretary of Commerce for Industry and Security Alan Estevez said it was “absolutely” a concern of Washington that the Asian country could use 7nm technology – or better – in military applications.
Industry analysts, including Jeff Pu of Haitong International Securities, have estimated that Huawei could build up to 70 million smartphones with its own Kirin chips in 2024 – not insignificant compared to the roughly 220 million iPhones that Apple Inc. ships annually.
In another area of concern for Washington, China is also pushing ahead with the development of memory chips – a type of silicon more commercially used than processors but still crucial to everything from smartphones and AI training servers to military drones.
Canadian research firm TechInsights Inc. discovered an advanced Yangtze Memory chip in a solid-state drive released around July, months after U.S. restrictions announced last year forced foreign equipment suppliers to cut ties with the Chinese semiconductor company. TechInsights, which discovered SMIC and Huawei’s 7nm chip as part of a joint investigation with Bloomberg News, found the 232-layer quad-level cell 3D NAND chip during a routine device teardown and called it one of the most advanced , who had ever seen it.
“YMTC is quietly developing advanced technology despite being hampered by post-sanctions issues,” TechInsights said in a blog post on Tuesday. “There is growing evidence that China’s efforts to overcome trade restrictions and build its own domestic semiconductor supply chain are having more success than expected.”
– With assistance from Gao Yuan, Ian King and Jane Lanhee Lee.
(Updates with SMIC stock action from fifth paragraph)
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