Expectations grow for heightened US containment measures against China, says DIGITIMES Research

Eric Chen, Taipei; Jingyue Hsiao, DIGITIMES Asia 0


Amid US sanctions and the visit of US Commerce Secretary Gina Raimondo to China, Huawei's Mate 60 Pro, featuring the homegrown Kirin 9000s chip based on SMIC's N+2 process, has sparked much discussion. DIGITIMES Research believes the US may mount new policies to contain China's semiconductor development.

US sanctions restrict Huawei from using TSMC's technology for its chips. The Kirin 9000s is being manufactured by SMIC. DIGITIMES Research believes that the alliance between Huawei and SMIC is an inevitable combination as Huawei is experienced in developing advanced chips, and SMIC has the most advanced manufacturing technologies among China-based foundries. It is expected that Huawei and SMIC will continue improving their IC design and chip manufacturing capabilities, respectively.

In theory, 5nm chips can be made using multiple immersion exposures by DUV. Therefore, SMIC has room for improvement in advanced processes, though whether it will commercialize the technology remains to be seen.

Still, SMIC can increase yields and achieve cost improvements by accumulating production experience so that Huawei's advanced chips can keep being made and shipped. The production volume of the chips will be determined by the quantity of immersion DUV lithography systems that SMIC can acquire and the yields.

Meanwhile, although Japan and the Netherlands began enforcing their export restrictions, ASML confirmed earlier that the company had obtained a license from the Dutch government to ship NXT:2000i plus systems to China, impacting the US containment of China.

DIGITIMES Research believes that more signs are emerging, implying that China, at least to some degree, managed to break through the containment the US imposed, and the US is expected to work on plugging loopholes. In addition to further restricting Huawei's access to chips and components, the US may also tighten restrictions on SMIC's chip production capability through new measures in the future.

It remains to be seen and is also worth noting whether the US will bar ASML from shipping its advanced tools to China by Foreign Direct Product Rules or by preventing ASML from offering technical, materials, and components support, expanding its restrictions against SMIC in sub-40nm manufacturing capabilities.