With TSMC, ASML and Intel nowhere to be seen, China’s small semiconductor players take centre stage at industry expo
- Small Chinese companies are getting all the attention at a semiconductor expo in Chongqing after trade restrictions have made them more appealing options
- China’s domestic semiconductor industry has gotten a boost as the country scrambles for self-reliance in all parts of the industry supply chain
As a result, the floor was dominated by delegates from local Chinese governments trying to woo potential investors and small players eyeing fresh business opportunities.
“Previously, the slots of level-1, level-2 and level-3 suppliers were all occupied by foreign brands, and local brands can only wait in line,” said Teng Ran, head of integrated circuit research at CCID Consulting, referring to the priority of supplier selection. “But many companies in China are now proactively looking for domestic suppliers … and this creates business opportunities.”
Teng said that China has no other choice but to try to build up a “full supply chain”, a process that could take years, while noting that no country has yet been able to have a semiconductor supply chain solely reliant on local suppliers.
At the same time, though, China could seek to gain an advantage in a few niche areas of the industry.
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Gu Changshi, an investment promotion officer from the New Lingang Area in Shanghai‘s Pilot Free Trade Zone, said the US decision to limit China’s access to chip technologies is “giving an opportunity” to many small Chinese industry players, which would have no chance had US technologies been readily available.
The government has since pushed to develop Chinese alternatives to US suppliers at almost every level of production, from chip design tools to packaging.
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Jin Yufeng, a professor at Peking University’s School of Electronics Engineering and Computer Science, said there are some paths China could explore to survive the restrictions.
While China cannot buy the latest Extreme ultraviolet lithography systems from ASML, the main supplier of machines needed to produce chips using advanced 10-nanometre nodes or smaller, the country could instead focus on developing “packaging” technology, according to Jin.
This would allow Chinese companies to make products with similar performance by putting multiple chips together, an increasingly appealing option as Moore’s Law – doubling the number of transistors on a microchip every couple years – edges towards its physical limit.
