Chip giant Taiwan Semiconductor Manufacturing Company (TSMC) recently announced plans to add a new production line to its existing plant in Nanjing, China. But experts in the Chinese telecommunications industry wrote a dissenting article arguing that China may not be able to get the technology it wants from TSMC and Chinese companies will face more competition. It was.
On April 22, TSMC convened an extraordinary board of directors to approve an investment of $ 2,887 million to set up a new production line for 28 nanometer (nm) chips at its Nanjing plant in China, with monthly production of 40,000. We anticipate mass production of units. By 2023, according to Taiwan’s Liberty Times.
The next day, an article by Chinese telecommunications expert Xiang Ligang was published, warning that TSMC’s plans would seriously hurt China’s chip industry and urging Nanjing’s local government to stop TSMC’s move.
China’s tip industry hampered by U.S. sanctions
The United States has blacklisted a major Chinese semiconductor company because of security concerns – Huawei, SMIC, (Semiconductor Manufacturing International Corporation) and Feiteng, and exports of chips below 10 nm are restricted. April 16th, two U.S. lawmakers letter Demands the Secretary of Commerce to ban American tool-using chip makers from selling chips larger than 14 nm to Chinese companies.
In his article, Xiang pointed out that TSMC maintains state-of-the-art technology, such as below 7 nm, and 90% of its production capacity in Taiwan. With a $ 12 billion investment, Arizona’s 5nm chip manufacturing project is TSMC’s only state-of-the-art project outside of Taiwan.
In addition, TSMC has complied with US sanctions banning export control of chip supplies to Chinese companies such as Huawei, SMIC and Feiteng, Xiang said.
He said China needs advanced technology below the 14nm process, not above the mature technology of the 28nm process.
“China cannot acquire advanced process technology”
It is well known that the Chinese Communist Party (CCP) has acquired the key technology coveted from abroad by either forced technology transfer, theft, or poaching.
Over the past few years, China has poached hundreds of TSMC engineers, bringing corporate secrets to state-owned enterprises. The current Vice Chairman of State SMIC, Chiang Shangyi, and CEO Liang Mong Song are both former TSMC veterans and top experts.
However, Xiang is concerned that China will not be able to obtain key technologies from TSMC at this time.
“If we support TSMC’s production expansion in Nanjing, China will not be able to acquire advanced process technology for chip manufacturing and Chinese companies will not be able to acquire advanced chip products. Our chip industry will still be restrained. [by the U.S. sanctions]”Sho wrote.
Xiang is also concerned that TSMC will crush Chinese chip makers by dumping, thereby dominating the Chinese market. This is a typical approach that CCP-controlled companies often use to crush foreign competitors.
SMIC gets huge amounts of state funding
TSMC started mass production of 28nm chips as early as 2011, and the current yield is as high as 90-95%. According to the Chinese mass media, SMIC, a major Chinese chip processing company, produces significantly less 28nm chips than TSMC. However, no specific figures have been provided so far.
However, in a March SMIC promotion campaign, Chinese mass media advertised that SMIC yields caught up with TSMC yields, achieving 90-95% yields in the manufacture of 14 nm chips.
Xiang doesn’t believe this claim because TSMC said it could easily beat a Chinese chip company.
SMIC’s two recent large-scale production projects are both backed by government funding. According to China’s news portal Sina, SMIC announced last month that the company and the Shenzhen government will jointly invest in a $ 2.35 billion project to produce wafers of 12 inches 28 nm and above, producing 40,000 units per month from 2022. Did. The production capacity of SMIC is similar to the predicted production of TSMC at the Nanjing plant, which is one year earlier than TSMC.
Last December, with the support of China’s “Big Fund” Phase II, SMIC invested a total of $ 5 billion to build a 12-inch chip manufacturing and packaging project at its Beijing plant. The project is expected to be completed in 2024, with monthly production of approximately 100,000, Sina reports.
According to Sina, SMIC will start on April 1st this year. Foundry The price will be fully adjusted and the price will increase by 15% to 30%. A foundry is a semiconductor manufacturing plant whose main business is to manufacture chips for other fabless IC (integrated circuit) companies. All US companies are fabless companies, and the manufacturing of designed chips depends on fabless companies in Taiwan.
China currently relies heavily on foreign chips for technology manufacturing, but Beijing aims to produce 70% of semiconductor demand domestically by 2025 under the industrial policy of “Made in China 2025”. ..
On September 3, 2020, Beijing promised to spend another $ 1.4 trillion by 2025 to boost the semiconductor industry. Bloomberg, Quote an unnamed source.