The US government will allow top chip makers Samsung, SK Hynix and TSMC to maintain and expand existing memory and logic factories in China, the report said. wall street journal said, citing a U.S. Department of Commerce official. If this information is correct, the trio will be able to purchase new fab tools from US-based manufacturers for their Chinese fabs, but there is a catch.
Commerce Undersecretary for Industry and Security Alan Estevez said the administration’s continuing exemptions to South Korean and Taiwanese chip makers in connection with the latest U.S. export control rules aimed at limiting the capabilities of the Chinese semiconductor industry. revealed the plan. These exemptions were originally granted in October last year and were due to expire in October this year.
A person present at the discussion said the confirmation was made by Estevez during talks with the Semiconductor Industry Association and that the exemption is expected to continue “for the foreseeable future.” However, the Department of Commerce has chosen to refrain from further comment on the matter.
U.S. Wafer Fabrication Equipment (WFE) makers receive approval from the Department of Commerce before exporting tools capable of manufacturing 128 3D NAND chips, logic chips with non-planar transistors on 10nm/14nm/16nm and below nodes. An export license must be obtained. Provide Chinese customers with sub-18nm half-pitch DRAM ICs.
Chip makers such as Samsung, SK Hynix and TSMC have to upgrade their factories frequently to keep their products competitive. All three companies have received exemptions from the U.S. government allowing them to export necessary production equipment to China from October 2022 to October 2023, with the possibility of extending the exemptions for another year. Apparently, the U.S. government now intends to allow Samsung, SK Hynix and TSMC to install U.S.-made wafer fabrication tools at their Chinese semiconductor production facilities beyond October 2024.
But let’s move on to that pitfall. The conditions for receiving state funds under US CHIPS and science law prohibit beneficiary companies from investing in their own factories located in China. The policy could have significant implications for international companies such as Samsung, SK Hynix and TSMC, which operate significant facilities in China and are potential applicants for US funding. Under current conditions, if any of these companies obtain CHIPS funding, they will not be able to invest in expanding or upgrading their factories in China for 10 years.
Currently, SK Hynix is the only producer of DRAM in China. It is unknown what production technology is used there. Both Samsung and SK Hynix manufacture 3D NAND in China using a 128-layer process, according to TrendForce. Meanwhile, TSMC’s Fab 16 in Nanjing, Jiangsu, China, is producing chips on the company’s 16nm FinFET node.
So far, 16nm FinFET and 128-layer 3D NAND manufacturing process are competitive. But at some point they will become obsolete, and if Chinese chip makers cannot follow their agreement with the US government to invest in upgrading their Chinese factories, they will have to make strategic decisions about them. . The behavior of CHIPS does not change.
