While the COVID-19 pandemic and international trade disputes put pressure on the industry’s supply of semiconductors, as well as competition for technological dominance between value chains, the United States (US) and Asia, particularly China, is now taking a new turn. Is.
China’s current chip manufacturing capabilities have raised eyebrows in the US. According to recent reports, it is believed that the Chinese Semiconductor Manufacturing International Corporation (SMIC) may be able to extend the chipmaking technology by two generations.
Tech Insights’ latest analysis report highlights that according to an investigation into the Minerva bitcoin mining chip, SMIC has manufactured a 7-nanometer chip using a manufacturing technique that is developed by Taiwan Semiconductor Manufacturing Company (TSMC). was a reasonable replica of a comparable method employed by. ,
“It also has significant implications for Chinese chip companies, as it helps reduce China’s reliance on Western technologies during this time of restricted access,” the analysis said.
Given how China is proceeding with its indigenous semiconductor sector, US officials have advanced discussions on funding a historically hefty subsidy package for the US semiconductor industry.
The US Senate has voted to advance debate on the country’s Chips Act. It’s a bill that includes a $52 billion incentive for chip makers to build plants on American soil.
The move can be seen as an important step in strengthening the US supply chain and America’s ability to compete with China in the global technological arms race.
The question is, will this be enough to become a semiconductor powerhouse? Maybe not.
Despite such a huge investment to set up more chip-making plants in the US, it cannot help but reduce its dependence on the Asian market.
The US will probably need hundreds of billions in spending and many more years to meet its hold with Asian chip makers.
The US has lagged behind Asian chip makers in terms of advanced chip technology. Intel and others rely heavily on TSMC for the 5-nanometer chips. According to Capital Economics, the Taiwanese company accounts for 92% of the world’s supply.
But Intel has said that to catch up, it is spending $44 billion on new fab factories in Europe, Israel and the US. But again, according to experts, this race to become the semiconductor leader requires billions of investments every year, not once or twice.
Once again, here comes the role of the Chips act. It is believed that the act would support chip makers such as Intel, while providing little confidence that the efforts of these manufacturers would lead to a significant increase in chip supply in the US.
Chipmakers including Intel, Micron and GlobalWafers have told Congress that they will move their manufacturing facilities to other countries if the CHIPS Act is not passed, and that is not good news for the US.
According to reports, Intel recently postponed the ceremony for its $20 billion new Ohio facility since the US Congress is yet to enact the bill. On the other hand, a total of $7.3 billion from the EU’s $46 billion European Chip Act was used this February to subsidize Intel’s new manufacturing facility in Germany.
However, experts also believe that the US’s lack of manufacturing capacity is putting pressure on Asian chip makers to set up facilities in the country.
Fortune reported that over the next decade the jobs produced by the CHIPS Act will also depend on foreign countries because the US lacks skilled personnel to fill these positions.
According to an estimate by Eightfold.AI, the US would need to double its current workforce by 50% to fulfill the roles if it built 20 new factories and created 70,000-90,000 new workers.
asian domination
In the context of the latest revelation about China’s advanced chipmaking technology, David P., an American economist. Goldman said on Twitter that although according to Tech Insights’ analysis “SMIC’s 7nm chip is a ‘low volume production’ item that ‘could be a stepping stone. The stone for a true 7nm process'”, it is “still a success”.
Meanwhile, Yole Development, a French semiconductor consulting agency, this year released a report on the global silicon carbide (SiC) and highlighted that the SiC device market will reach $6.3 billion in 2027. There are over 50 semiconductor firms, especially in mainland China. Active in the SiC market include SMIC, SICC, TankeBlue Semiconductor Co., Ltd. and others.
However, according to a local media report last year, Lin Benjian, former vice president of R&D at TSMC, said that with current technology, SMIC can mass-produce 5-nm semiconductors without using EUV lithography, Which is used for patterns of fine detail. On the most advanced microchips.
The US is pushing the Netherlands to stop selling the chip-making equipment to China, which is buying EUV lithography from ASML Holdings. But according to Lin’s statement, the ban will have no effect on China.
According to the report, Lin claimed that the success of SMIC in 5-nm chips depends on whether the technology research and development skills are present.
Putting aside China’s SMIC’s new advances, it is important to know why this competition will be challenging for the US which is up against the Asian market.
Currently, Taiwan, China and South Korea produce most of the world’s chips due to their 25-40% lower manufacturing costs, while the US share in semiconductor manufacturing has fallen from 40% to 12% in three decades.
TSMC is the largest contract chip maker in the world and an important supplier to tech giant Apple, which holds the revenue majority in the worldwide semiconductor foundry market.
However, while TSM produces about 90% of the advanced chips produced globally, Intel generates more income.
While it was reported that mass manufacturing of TSMC’s 3-nm process would begin in the second half of 2022 and the Taiwanese chipmaker is also expected to have 2nm chips soon, South Korean giant Samsung announced earlier in June this year. It has started making 3nm semiconductors. ,
Additionally, TSMC has released details of its much-anticipated 2nm production process node, which will have a nanosheet transistor architecture and will be available in 2025, along with an upgrade to its 3nm technology.
TSMC also intends to invest $100 billion over the next three years to maintain its worldwide leadership.
Meanwhile, it is noteworthy that India It is also preparing to enter this semiconductor race.
Government of India has launched Semiconductor Mission under the banner of “Atma Nirbharat in Electronics and Semiconductors” and has already approved Semicon India program with a total outlay of Rs.76,000 crores for development of Semiconductor and Display Manufacturing Ecosystem in the country. .
While the mission is in its early stages, it is believed that the initiative will pave the way for India’s increased participation in global electronics value chains, highlighting the country as another competitor from Asia.
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