An analysis of China’s semiconductor technology shows it is just three years behind Taiwan Semiconductor Mfg. Co. Ltd. TSM.
What Happened: The report highlights the limited impact of U.S. export restrictions on China’s consumer chip production. Hiroharu Shimizu, CEO of TechanaLye, shared insights with Nikkei, showing that China’s chip capabilities are rapidly advancing.
Shimizu presented semiconductor circuit diagrams from two Huawei Technologies smartphones: the Pura 70 Pro, released in April, and a 2021 model. The latest phone’s chip, Kirin 9010, was designed by HiSilicon and mass-produced by Semiconductor Manufacturing International Corp. (SMIC).
Despite U.S. measures to curb advanced chip technology, SMIC can produce 7-nanometer chips. These chips are nearly comparable in performance to TSMC’s 5-nanometer chips, which were used in Huawei’s 2021 phone.
SMIC’s 7-nm chip is 118.4 square millimeters, while TSMC’s 5-nm chip is 107.8 sq. mm. Both chips have similar performance levels, indicating SMIC’s progress.
Shimizu noted that 86% of the Pura 70 Pro’s chips were made in China. He stated that U.S. regulations mainly target cutting-edge server chips for AI and other applications, allowing other developments to continue.
“As long as the chips do not pose a military threat, the U.S. is probably allowing their development,” Shimizu said.
Chinese companies accounted for 34.4% of global chipmaking equipment purchases in 2023, doubling the figures for South Korea and Taiwan. This trend suggests China’s growing mass-production capabilities and the potential industry impact.
Why It Matters: China’s rapid progress in semiconductor technology comes amid heightened global tensions over chip dominance.
The Netherlands’ recently elected prime minister is expected to block ASML Holding NV from assisting Chinese companies with repair and maintenance services. This move could significantly impact China’s ability to produce advanced semiconductors, as ASML is the sole supplier of extreme ultraviolet lithography machines.
Additionally, Chen Nanxiang, chairman of the China Semiconductor Industry Association, has predicted a significant surge in China's chip industry within the next three to five years. Chen emphasized the industry’s shift towards a market-driven model, focusing on innovation in products, services, and business models.
Furthermore, China has committed over 43.5 billion yuan ($6.12 billion) to build computing data centers, following the U.S. semiconductor embargo. This investment aims to boost China’s data processing capabilities.
China’s semiconductor spending has also topped the U.S. with a $142 billion commitment, reflecting the intense global race to dominate the chip industry. This substantial investment underscores the strategic importance of securing a steady flow of semiconductors.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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