The development of China's semiconductor industry has faced obstacles due to the actions of the United States and its allies, who have cited national security concerns. Gerald Yin, the founder, chairman, and CEO of China's Advanced Micro-Fabrication Equipment Inc. (AMEC), recently highlighted the comprehensive ban imposed by the US on October 7, 2022, as a turning point. Yin believes that the true intentions of the US government have become evident since then, resulting in China lagging behind by at least five generations in semiconductor chip manufacturing technology.
According to reports from SCMP and Chinese media, Yin pointed out that both the Trump and Biden administrations implemented 15 rounds of semiconductor-related restrictions from 2019 to the present. These measures aimed to hinder China's semiconductor industry and maintain at least a five-generation gap with foreign countries, even in processes as advanced as the 14-nanometer technology.
Yin emphasized the impact of the current situation on China's semiconductor manufacturing technology, stating that the gap between China and foreign countries has grown from a 2-generation difference to a 5-generation difference due to the recent restrictions. As a result, China has been pushed back from the 3-nanometer process to the 14-nanometer process. This setback restricts China's semiconductor industry to work only on mature processes of 28 nanometers and above, which is not satisfactory for the country's industry.
Although SMIC is one of the few Chinese companies that has reached 14-nanometer production, it quietly removed information about its 14-nanometer process technology foundry solutions from its official website in May 2023. In addition, the company did not mention the 14-nanometer process technology in its two consecutive financial results conferences in 2023.
While Yin directly highlights the US intention to hinder China's progress, reports from the same conference suggest that some industry insiders believe that amidst the US blockades, there is an opportunity for China to foster the growth of its semiconductor equipment sector.
China currently has over 200 companies in the semiconductor equipment and components sector. However, the fragmented nature of the industry in China means that some local chip equipment and materials cannot fully meet the core needs of wafer fabs. Therefore, in the short term, it remains challenging to replace imported chip equipment.
