According to Bloomberg, the U.S. government is trying to limit China’s military potential by denying access to government-controlled entities that lead processor design, chip development, and production capacity. As a result, billions of dollars have been lost from the global market value of the semiconductor industry. Some US companies have already restricted access to the products and services of certain companies based in China, while others are waiting before the US government officially announces the restrictions.
As the world’s second-largest economy and the world’s factory, China is understandably a large consumer of semiconductors and produces a large number of chips domestically. China must adopt the latest technology, designed domestically and elsewhere, to support its economic and humanitarian development.Still, these technologies could also help increase China’s military potential, something that no one in or outside the region likes. , pose risks not only to US allies such as Japan, South Korea and Taiwan, but also to the US
To crack down on, or at least specifically slow, China’s military development progress, the United States has been gradually imposing restrictions on China’s chip industry for several years. Still, the Biden administration is poised to impose even tougher sanctions on China’s semiconductor sector in the coming weeks or months. In particular, the current government has asked Chinese contract chipmaker Semiconductor Manufacturing International (SMIC) to stop producing chips using the 14nm-class manufacturing technology (and thinner) node, and Yangtze. • It seems that they want to stop Memory Technologies, Inc. (YMTC). Advance 3D NAND memory.
US officials plan to impose stricter rules on the export of advanced semiconductor technology from the US to China. But because the chip industry is global, the US government’s decision will affect the entire semiconductor supply chain. The capitalization of large chip companies has been declining for some time now (and here it is) as investors anticipate a slowdown in chip demand. Tighter restrictions from the US will hurt more semiconductor companies. as a result, Philadelphia Stock Exchange Semiconductor Index (opens in new tab) — a modified market capitalization-weighted index composed of semiconductor companies — hit a record low this week.
Suffering semiconductor companies
Several types of semiconductor industry companies will suffer from U.S. attempts to crack down on China’s high-tech industry and hinder the development of the country’s military might.
Started chip development Intellectual property and electronic design automation (EDA) tools. Companies like Ansys, Cadence, Keysight, Synopsys sell a lot of software and his IP blocks to Chinese chip designers. About 13% of Cadence and Synopsys’ 2021 revenue will come from China, not including the various chip designs developed elsewhere with China in mind. There are other providers of EDA and similar tools in other countries, and Cadency and Synopsys are the market leaders, but using software from Siemens EDA (Germany), Zuken (Japan), or Primarius Technologies (China) for chip design It is also possible.
I don’t know if the US government has the authority to restrict licensing of Arm chip designs to Chinese customers. Also, the U.S. government can restrict the use of U.S. chip development tools by contract chip designers like Alchip to create chips for certain Chinese companies.
foundryHundreds of chip designers in China are developing chips that require sub-14nm/16nm process technology. At least a dozen companies can use state-of-the-art production nodes such as TSMC’s N4/N5 and Samsung’s 3GAE/5LPP. If the use of advanced manufacturing processes (including his relatively mainstream 14nm/16nm class node) is banned, the chip’s contract makers will lose revenue and profits.
Semiconductor manufacturing equipment manufacturerChina is not exactly a leading country in chip production. Still, there are thousands of chip developers in the country (most are working on ICs for emerging applications such as Internet of Things, smart homes and smart cities), and they need a lot of domestic semiconductor capacity. As a result, China has become one of the largest markets for companies such as ASML, Applied Materials, KLA and Lam Research.
Even without the U.S. government announcing tougher restrictions on Chinese memory and logic manufacturers, KLA announced on Tuesday that it could manufacture 3D NAND with 128 layers or more, DRAM chips at the 18nm node or less, and certain advanced logic. Chips has stopped selling tools to Chinese companies ReutersContrary to expectations, KLA has stopped shipments to companies such as SMIC and YMTC, as well as SK Hynix, which produces memory in China.
chip designer AMD, Nvidia, Intel, etc. also sell tons of advanced chips to various Chinese companies. Recently, however, the US government banned the sale of AMD and Nvidia’s high-performance computing GPUs to Chinese customers, including cloud companies such as Alibaba and Baidu. Nvidia’s quarterly revenue could be cut by up to $400 million if the government didn’t allow it. The company will fulfill existing orders and continue to work with its Chinese manufacturing partners for the foreseeable future.
In particular, the U.S. government wants U.S. companies to sell supercomputing-grade hardware to Chinese entities capable of building machines with performance exceeding 100 FP64 petaflops or 200 FP32 petaflops within 41,600 cubic feet (1,178 cubic meters). I’m not chinese renaissance (opens in new tab).
Some say the US government’s decision will accelerate the development of high-end computing GPUs by Chinese companies such as Biren Technologies. Some say Nvidia is years ahead of any China-based company when it comes to artificial intelligence and high-performance computing software stacks. But either way, China is a big market for high-performance CPUs and GPUs, so a crackdown is inevitable to hit companies like his AMD, Nvidia, and Intel.
Whether to send back China’s giant cloud or to contain the development of new military capabilities is debatable. On the one hand, it hits companies like Alibaba, Baidu and Tencent. But on the other hand, you can buy inferior hardware from AMD or Nvidia, so you don’t lose access to American technology overnight. Still, you have to spend more on power, data center space, and maintenance.
does it work?
U.S. sanctions on China’s high-tech sector are aimed at controlling what China gets and restricting some of the technology to the People’s Republic without completely destroying China’s high-tech and economic potential. . Therefore, the appropriate US organization has approved 88% of technology exports to China in 2021.
But if approval rates drop dramatically, Chinese semiconductor companies (and the industry as a whole) will suffer. It will take years and hundreds of billions of dollars for China to replace all its technology with American ones.
On the chip production side, the good news for China is that Japan-based chip tool companies such as Nikon, Canon and Tokyo Electron will suffer a US crackdown as they try to develop technology-free equipment. It is highly possible. Designed in the USA. But assuming they succeed, and China-based manufacturers advance with their tools, his SMIC and his YMTC in China can continue to advance chip technology (if the U.S. government uses follow-on nodes). (assuming that it does not try to suppress chip production by means of
On the chip design side of the issue, things are pretty complicated. Local chip developers have little experience designing supercomputer-class chips. Some items could be mitigated by leveraging modern chiplet-based design approaches, but China may need to replace something like Nvidia’s A100/H100 computing GPUs. We don’t have enough engineers and senior managers to handle all of the potentially large semiconductor projects. According to Chinese Renaissance. Meanwhile, Taiwan and the US are currently restricting the hiring of chip experts by Chinese companies, making it more difficult for Chinese companies to acquire the right talent.
Tight restrictions on China’s semiconductor industry could have a dramatic impact on local chip makers, but the US government has not completely restricted access to US technology by Chinese companies. However, when this happens, the effects are far-reaching. It will take years for China to replace American technology. This will have a dramatic impact on China’s economic development.
So far, however, investor concerns over a significant drop in semiconductor demand and concerns about the future of the global semiconductor industry should the US decide to impose tougher sanctions on China’s semiconductor sector have pushed the US More capital is being erased than concrete action by governments.
