“Huawei ‘Unable to Secure 3.5 Nanometer Chips’”, 2024-06-10 (; backlinks):
Within the Chinese semiconductor industry, there’s a growing belief that the government’s ambitious semiconductor initiative is reaching its limits. This comes as the U.S. intensifies its pressure on China, compelling local companies to focus on expanding their legacy semiconductor capabilities instead of pursuing cutting-edge technologies.
On June 9, during the Mobile Computility Network Conference in Suzhou, Huawei’s Cloud Services CEO, Zhang Ping’an, expressed concerns over China’s inability to secure 3.5 nanometer (nm) chips amidst U.S. sanctions. “Taiwan’s TSMC is increasing its supply of 3.5 nm semiconductors. However, under U.S. sanctions, China has no way to secure these products”, Zhang said. He added, “It’s fortunate that we’ve managed to address the 7 nm issue. The reality is that we can’t introduce advanced manufacturing equipment due to U.S. sanctions, and we need to find ways to effectively use the 7 nm semiconductors.” [and the 7nm equipment is apparently burning out]
Zhang’s comments were surprising to many in the industry, as they starkly contrast the previously reported confidence in China’s semiconductor growth.
…As Zhang noted, producing 3.5 nm semiconductors would require EUV lithography machines, which Huawei is reportedly developing independently. However, circumventing U.S. and Dutch [ASML] patents to internalize this technology is considered highly challenging.
The local memory sector is also experiencing difficulties. The U.S. has restricted its equipment companies from exporting 128-layer NAND equipment to Chinese companies. It has been reported that companies like YMTC are facing investment delays due to their inability to timely secure equipment from U.S. firms like Lam Research.
…Zhang’s statement implies a strategic shift towards dominating the legacy market, as companies like SMIC and Hua Hong Semiconductor continue to gain influence in the legacy foundry market. Market research firm Trend Force predicts that China’s share in the legacy semiconductor market will increase from 29% in 2023 to 33% by 2027.