With the US tightening restrictions on China's access to chipmaking gear, such a development will have a negative impact on Samsung Electronics and other major Korea-based chipmakers, according to sources at fab toolmakers.
Samsung has in recent years been expanding its memory and other chipmaking business in China amid the escalating US-China trade war. Also operating a fab in Xi'an of China's Shaanxi province, Samsung has seen revenue generated from the China market account for about 30% of revenue, the sources said. SK Hynix, another major Korea-based chipmaker, also sees the China market contribute around 30% to total revenue.
However, tougher US controls of semiconductor tech exports to China may pose a challenge to Samsung's and SK Hynix' business expansions in China, the sources indicated.
Earlier in August 2022, the US president Joe Biden signed into law the Chips and Science Act to provide US$52.7 billion in subsidies to boost semiconductor manufacturing and technology R&D in the US. Samsung and TSMC, which have plans to build fabs in the US, are among the beneficiaries.
Nevertheless, companies accepting Chips Act funding are required not to invest in sub-28nm process manufacturing and technology R&D in China during the 10-year period beginning on the date of the awarding of the funding. It would prohibit Samsung and SK Hynix - each running a memory fab locally in China - from investing in advanced process manufacturing at their local fabs, the sources noted.
For TSMC, the expansion focus of its Nanjing fab is put on 28nm process manufacturing at the moment, the sources said.
In addition to the Chips Act prohibiting recipients of federal funds from expanding or upgrading their sub-28nm chip capacity in China for 10 years, the US fresh export bans on chipmaking technologies will prohibit China-based IC design houses from using the ECAD/EDA software of gate-all-around field-effect transistor (GAAFET) structure to design advanced chips in the future.
On August 12, the US Department of Commerce's Bureau of Industry and Security (BIS) announced a ban on export of ECAD software specially designed for the development of ICs with GAAFET structure.
Samsung, which has transitioned to GAA transistors from FinFET in its 3nm process manufacturing, will be incapable of obtaining orders with its 3nm GAA process technology from China-based IC design houses, the sources indicated. TSMC's 3nm process will still utilize FinFET transistor's structure.
Speculation has also been circulating in the chipmaking industry that the US is looking to ban the sale of fab tools for making chips at 14nm and below. The potential new rules could curb not only China-based foundries' competitiveness but also Samsung's and SK Hynix's memory businesses in China, according to the sources.
Article translated by Jessie Shen
