Tag Archives: Semiconductor

US To Block New Advanced Chip Fabs In China!

US To Block New Advanced Chip Fabs In China!

The US aims to block the construction of new advanced chip fabs in China and countries of concern like Russia.

Here is what you need to know…

 

US To Fund Building Of Advanced Chip Fabs!

The US Congress just passed the historic CHIPS and Science Act (HR 4346) – a massive $280 billion bill designed to bolster innovation and tech hubs in the United States.

The legislation passed with a Senate vote of 64-33, and a House vote of 243-187, approving :

  • $76 billion of funding to revive and boost chip production in the United States
  • $81 billion for the National Science Foundation over 5 years, for research, equipment and STEM education
  • Almost $10 billion for the National Institute of Standards and Technology

TSMC, Intel and Samsung are expected to benefit from the billions of dollars of funding, which would subsidise their construction of new advanced chip fabs in the United States.

Read more : Did China Make 7nm Chips In Spite Of US Sanctions?!

 

US To Block New Advanced Chip Fabs In China!

There is however a big caveat in the legislation that the White House is expected to sign – any company that receives funding will be barred from building new advanced chip fabs in China and other countries of concern, like Russia.

The CHIPS and Sciences Act specifically bars companies that receive federal funding from “materially expanding” production of chips more advanced than 28 nanometres (28 nm) in countries of concern like China and Russia, for 10 years.

28 nm chips are not state-of-art, with production first starting more than 10 years ago – in 2011. However, they are still used in many applications, and China is free to keep producing these chips.

This move though will essentially limit development of advanced chips in China, by blocking foreign chipmakers from investing in more advanced fabs.

Intel had earlier lobbied hard against this move. In late 2021, Intel wanted to expand production in China but was pressured to sell its Dalian wafer plant to South Korea’s SK Hynix. Intel now only has chip packaging and testing facilities in China.

But that changed, and now Intel CEO Pat Gelsinger is a big proponent of the bill, even suggesting that it might forego building its Ohio mega fab and shift it to Europe if the legislation did not pass.

Read more : China Bans Taiwan Food Over Pelosi, But Not Chips!

Currently, the only semiconductor companies investing in fabs in China are Samsung and TSMC. So if they choose to accept US funding, both companies will have to stop building fabs that can produce chips that are more advanced than 28 nm.

Of the potential recipients of US funding, TSMC is the only company making relatively advanced chips in China. Its Nanjing fabs currently make 28 nm and more advanced 16 nm chips.

Unless TSMC spurns US funding, it won’t be able to invest in more advanced fabs in China. This will force China to rely on its own SMIC to develop more advanced chipmaking technologies.

While SMIC has had some success with a 7nm process using older DUV technology, it came at the expense of yield and chip complexity.

Unless China is somehow able to develop its own EUV technology, it’s pretty much end game for more advanced chip production in China… for ten years.

Read more : Did China Make 7nm Chips In Spite Of US Sanctions?!

 

US Quietly Expands Chip Equipment Ban To Fabs In China

In addition to the looming CHIPS Act, the US government also expanded its ban on the sale of machines for fabricating advanced chips.

The US government had earlier banned the sale of tools that allow China to manufacture chips at 10 nm or smaller. That ban was just extended to include tools that would allow the manufacture of chips 14 nm or smaller.

American equipment makers like LAM Research and KLA Corp. have received letters about this expanded ban, which appears to be limited to logic chips (like computer processors), but not memory chips.

According to the US Commerce Department, the move was meant to impair China’s ability to manufacture advanced chips :

The Biden Administration is focused on impairing PRC efforts to manufacture advanced semiconductors to address significant national security risks to the United States.

However, this move appears to be merely officiating what is already being practiced – the US Commerce Department had already declined many licences to sell 14nm fab equipment.

The Biden Administration is also pushing the Netherlands and Japan to ban ASML Holdings NV and Nikon Corp from selling advanced chip making equipment to China.

 

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China Bans Taiwan Food Over Pelosi, But Not Chips!

China just banned food imports over 100 Taiwanese companies right before US Speaker Nancy Pelosi landed in Taiwan, but unsurprisingly not microchips!

Here is what you need to know…

 

China Bans Taiwan Food Products Over Pelosi!

While US Speaker Nancy Pelosi was flying to Taiwan from Malaysia, the General Administration of Customs for China announced an import ban on food products from over 100 Taiwanese companies.

Of those 100 Taiwanese companies, 35 are exporters of biscuits and pastries, including famous Taiwanese companies like Kuo Yuan Ye Corp (郭元益), Yu Jan Shin (裕珍馨), Kuai Kuai Co (乖乖), Imei Foods Co (義美食品), Chiate Bakery (佳德) and Kuang Ta Hsiang Foodstuffs Co (廣達香).

The other companies exported food products like tea, honey and seafood. Of the 3,200 Taiwanese food products registered for export to China, 2,066 (64.6%) had their imports suspended.

Officially, Beijing says that the blacklisted companies failed to renew their export registration, and can only sell their products until the end of August 2022.

However, the late night announcement, and the fact that only Taiwanese exporters are required to file their registration documents by June 2022, instead of June 2023 like exporters from other countries; strongly suggest that this move was motivated by Pelosi’s visit.

 

China May Ban Taiwan Food Over Pelosi, But Not Chips!

Despite the dramatic late night announcement, this move was relatively benign as the banned exports only make up 0.1% or US$650 million of Taiwan’s total exports.

Last year, Taiwan exported US$44 million worth of pastries to China, but that fell to only US$10 million during the first half of 2022.

Seafood exports to China were more substantial at US$280 million, but tea exports were just under US$32 million, and honey exports was a minuscule US$35,000.

On the other hand, China does not dare to ban the import of Taiwanese microchips or electronics, because it has grown reliant on them.

After the US imposed sanctions on Chinese chipmakers in 2018, China increased imports of Taiwanese memory chips by a whopping 57% in just 3 years!

In fact, Taiwanese exports to China surged by 24.8% to an all-time high of US$188.9 billion in 2021, largely due to high demand for their computer chips.

No matter what their Wolf Warriors may threaten, China is still too reliant on Taiwan for high-end semiconductors to really threaten its supply, and it is not ready to invade Taiwan with a realistic chance of success.

By targeting only a small portion of relatively inconsequential Taiwanese imports, China is just slapping Taiwan on the wrist.

The Taiwanese should play along and moan like they have been mortally wounded to give China some face, so it can (gracefully) retreat from the uncomfortable corner it back itself into.

 

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He continues to devote countless hours every day writing about tech, medicine and science, in his pursuit of facts in a post-truth world.

 

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Did China Make 7nm Chips In Spite Of US Sanctions?!

Did China successfully fabricate 7nm chips, despite US sanctions on advanced chip manufacturing technology?

Well, yes, but not quite. Here is what you need to know about China’s mysterious 7nm chips!

 

China Made 7nm Chips In Spite Of US Sanctions!

A TechInsights report recently concluded that China has successfully created 7nm chips since last year.

This caused quite a ruckus, because it essentially meant that China jumped two generations ahead in chip manufacturing technology!

The TechInsights team bought a MinerVa mining ASIC which used a custom chip that has been manufactured by China’s SMIC since July 2021.

When they examined the chip, they discovered that it was fabricated on a 7nm process that appears to be a “close copy” of a 7nm process used by TSMC – the Taiwanese foundry giant.

The MinerVa chip is small – at just 19.3 mm², with 120 chips populating the MinerVa board. Each mining ASIC has 3 of these boards, for a total of 360 chips and a total power consumption of 3300 watts.

This discovery is deeply concerning to many people, because it meant that China has more advanced chip manufacturing technology than is even available in the United States or EU.

After all, US sanctioned the sale of advanced chip manufacturing technology to China – which was meant to crippled China’s ability to manufacture such chips.

US Senate Majority Leader Chuck Schumer used this report to stress the danger of delaying the $50 billion subsidy package for semiconductor manufacturing in the United States.

Members of both sides know that America’s chips crisis is sending shock waves across the economy.

It is endangering our national security. […] China’s top chips maker has now likely advanced its tech by two generations, threatening U.S. competitiveness.

But the situation really isn’t as dire as many people make it out to be…

 

SMIC / China Barely Made Those 7nm Chips

After the report was released, the Internet fell into two main camps – American politicians and China hawks bemoaning the “loss” of Western chip making advantage, and pro-CCP netizens celebrating it.

First, let me start by congratulating China / SMIC on achieving this feat despite being hobbled by US sanctions on crucial chipmaking technology.

Whether China / SMIC “copied / stole / bought” the technology knowhow from TSMC whose 7nm process it closely resembles, it is still a remarkable achievement.

That said, SMIC / China barely made those 7nm chips, and here are the reasons why…

SMIC manufactured these 7nm chips using older Deep Ultraviolet Lithography (DUV) machines, instead of the state-of-art Extreme Ultraviolet Light (EUV) lithography machines made by Dutch company ASML.

This isn’t extraordinary in itself – TSMC and Samsung had much earlier developed 7nm process nodes using the older DUV machines. However, this comes at the cost of “increased process complexity and design rule restrictions“.

That is likely why the MinerVa chip is not only very small, it actually lacks SRAM (Static Random Access Memory) that is critical in processors that run our computers and smartphones.

The simpler design and small size allow SMIC to obtain sufficient workable chips, even with a poor yield. However, the cost of chip would be much higher than if it was manufactured on a higher-quality process.

So for all intents and purposes – this should be considered as a niche / prototype 7nm process, and not a true 7nm process node.

On top of that, SMIC apparently isn’t capable of producing large quantities of these 7nm chips, suggesting either a yield problem, or difficulty in scaling up.

MinerVa has not been able to deliver the mining ASICs based on these SMIC 7nm chips in large numbers. A Bitcoin mining company – Stronghold Digital Mining, for example, said that it ordered 15,000 miners from MinerVa but only received about 3,200 units as of March 2022.

For China / SMIC to present a true “threat” as far as chipmaking is concerned, it would have to be capable of manufacturing MILLIONS of chips, not thousands.

Regardless of whether the Americans are howling in despair, or the pro-CCP netizens are howling in delight, China really does not have true 7nm chipmaking capability for mass production yet.

And even if they somehow manage to improve and scale up this 7nm DUV process, they cannot make more advanced chips without EUV machines made by ASML.

As long as the Dutch government holds firm on blocking sale of ASML’s EUV machines to China, this is likely as far as they can go… unless they invade Taiwan, which is where TSMC is based and has the world’s most advanced chip manufacturing facilities.

 

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He continues to devote countless hours every day writing about tech, medicine and science, in his pursuit of facts in a post-truth world.

 

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Chipmakers Brace For Noble Gas Shortage, After Russia Cut Supply!

Chipmakers worldwide are bracing for a noble gas shortage, after Russia cut supplies! Here is what you need to know…

 

Chipmakers Brace For Noble Gas Shortage, After Russia Cut Supply!

On June 2, 2022, the Russian government issued a decree stating that export of noble gases will be subject to Moscow’s approval until December 31, based on the recommendations of the Ministry of Industry and Trade.

This effectively cuts or limits the export of critical noble gases to “unfriendly” countries, and was a direct response to the fifth round of sanctions imposed by the European Union in April.

Russia and Ukraine were leading producers of noble gases since the days of the Soviet Union, and jointly supplied about 30% of the chipmaking industry’s supply of neon gas.

Both countries were closely intertwined in their noble gas supply to the world. Russia produced raw neon gas as a byproduct of its steelworks, and sent it to Ukraine for purification. That ceased with the Russian invasion of Ukraine.

 

How Badly Will Russia Noble Gas Cut Affect Chipmakers?

Noble gases like neon, argon, xenon and helium are critical in the production of microelectronics that power everything from computers to smartphones and cars.

Neon, in particular, plays a critical role in the optical lithographic process used to etch patterns on silicon wafers, creating circuits in semiconductor chips.

The state-of-the-art excimer pulsed laser used to create semiconductors, for example, requires an argon-fluorine-neon mixture, up to 95% of which is made up of exceptionally pure neon gas.

That’s why about 70% of the world’s supply of neon gas (about 540,000 tonnes) is used by the semiconductor industry.

Fortunately, Russia’s decision to cut noble gas supplies may have less impact that they assumed, because chipmakers prepared for such an eventuality.

The semiconductor industry used to rely on Ukraine and Russia for about 80% to 90% of their neon gas supply, but they started diversifying their noble gas supplies after Russia invaded and annexed Crimea in 2014.

Over the last 7-8 years, they managed to cut down their dependence on Ukraine and Russia to about 30%. And the industry generally maintains gas reserves that would last 3-6 months.

China is the main beneficiary of reduced noble gas supply from Russia. Since the war started, Chinese noble gas producers said that their daily order enquiries have jumped 5X to 6X.

For now, the semiconductor industry does not need to reduce production, but the reduced market supply will mean noble gas prices will remain elevated for some time to come.

Needless to say – this will increase the cost of semiconductors, the cost of which will be passed onto consumers.

 

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Dr. Adrian Wong has been writing about tech and science since 1997, even publishing a book with Prentice Hall called Breaking Through The BIOS Barrier (ISBN 978-0131455368) while in medical school.

He continues to devote countless hours every day writing about tech, medicine and science, in his pursuit of facts in a post-truth world.

 

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