China will use the old chips temporarily, waiting for the semiconductor industry to catch up with the US

Tram Ho

With the US-China trade war still raging, the Chinese government is doing everything in its power to strengthen the country’s tech industry. Leading Chinese companies like Huawei no longer have access to US chips or software that are particularly important to their products.

As of the time this article airs, China has the capacity to accommodate more than 20% of the required number of chips in its domestic industry, but its government is planning to increase that number up to 70%. year 2025.

This is part of China’s famous “3-5-2” policy to replace all foreign hardware and software in public infrastructure with “homegrown” solutions, and it will lead to Impacts are inevitable for some US technology giants like Dell, HP, and Microsoft.

Trung Quốc sẽ sử dụng tạm chip cũ, chờ ngành công nghiệp bán dẫn đuổi kịp Mỹ - Ảnh 1.

China is pouring unprecedented amounts of money into domestic tech companies hoping to close the technology gap with the US and Western countries as soon as possible. In 2019 alone, the Chinese government has approved to spend $ 29 billion in subsidies on companies like Zhaoxin, Huawei, and SMIC.

Zhaoxin is currently developing x86 processors, while Huawei is working on Arm core CPUs, as well as AI accelerated GPUs and cards. SMIC is considered the most important piece of the puzzle, reflected in the number of shares worth $ 7.6 billion sold to investors last year. It can be said that SMIC is China’s largest chip maker, and plays a key role in its effort to reduce its dependence on imported chips.

It is a great task, given China’s desire for more powerful “mainstream” chips than ever before, represented by 543 billion chips with a total value of $ 350 billion in 2020. This is the reason why China is and will continue to invest no less than $ 155 billion between now and 2025 to increase domestic semiconductor output over the next five years. And this investment is only part of the estimated $ 1.4 trillion budget that President Xi Jinping has set for China’s digital transformation journey.

Trung Quốc sẽ sử dụng tạm chip cũ, chờ ngành công nghiệp bán dẫn đuổi kịp Mỹ - Ảnh 2.

EUV lithography machine

Last year, the administration of Donald Trump sought to strangle SMIC’s ability to deal with manufacturers of photolitho equipment specialized in building advanced EUV machines. As a result, China now has to buy almost all used devices from countries such as Japan for $ 1 million per unit, even though they are slowly becoming obsolete before the emergence of more advanced equipment. a lot of. At the same time, China also buys US $ 1.2 billion worth of used DUV equipment from the Dutch manufacturer ASML.

As can be seen, China is using outdated equipment to manufacture chips for autonomous, industrial, and military applications – areas where nodes like 14nm and 28nm are more than enough. meet the needs.

Meanwhile, SMIC will build more 300mm wafers and look to catch up with TSMC and Samsung in manufacturing even more advanced process nodes. It was a bold plan, and it would take a decade to complete, not taking into account possible failures in the implementation process. However, that is much easier than Huawei’s mythical plan to replace TCP / IP protocol!

Reference: TechSpot

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Source : Genk