US-China tech war: semiconductor troubles cloud Beijing’s efforts for self-sufficiency as US mulls tougher sanctions
- China’s semiconductor industry remains heavily reliant on foreign equipment to produce chips, experts say, disadvantaging the country amid a tech war with US
- The Biden administration is considering additional sanctions on Chinese chip giant SMIC weeks after blacklisting several more entities
One major challenge for China is home-made equipment, which is technologically far behind imported equipment, according to Jin Cunzhong, deputy secretary general at China Electronic Production Equipment Industry Association (CEPEA), the industry body representing more than 180 Chinese chip equipment makers.
“Key equipment for semiconductor manufacturing is still reliant on foreign imports,” Jin said in slides presented at a forum in Chongqing on Wednesday. “China-made lithography equipment has not entered wafer mass production lines.”
China-made equipment such as those for chemical vapour deposition and ion implantation still have a large quality gap compared with those from foreign competitors, Jin said. In 2020, the combined market share of equipment from 56 Chinese companies was just 17 per cent in the country, unchanged from 2019, despite Beijing’s efforts to reduce reliance on imported gear.
Jin’s comments reflect China’s disadvantages in the ongoing US-China tech rivalry, scuppering optimism that China could quickly switch to domestic suppliers if access to foreign equipment were further restricted.
If implemented, it could make it more difficult for China to secure much-needed equipment for its chip plants, even undermining SMIC’s plans to expand production of mature-node chips. SMIC is currently building three new plants focusing on the 28-nm node process and larger in Beijing, Shanghai, and Shenzhen. Its co-CEO Zhao Haijun has warned of possible delays in US approvals of export licences to the company’s equipment suppliers.