Even mainland China’s largest chip processor is still a decade behind its top rivals in the US, Korea and Taiwan.

Tram Ho

According to many analysts, China's largest chipmaker SMIC, is still left behind by opponents for years of chip manufacturing technology.

This assessment is made when the world's second largest economy is facing a difficult task to narrow the technology gap with the US, South Korea and Taiwan as well as enhance the ability to sell autonomy. When the trade war with Washington is still happening.

Semiconductor Manufacturing International Corporation (SMIC) is currently China's largest foundry chip processor. The company makes chips designed by other companies and is a competitor to companies like Samsung and TSMC.

Ngay cả hãng gia công chip lớn nhất Trung Quốc đại lục vẫn thua kém cả chục năm so với các đối thủ hàng đầu của Mỹ, Hàn, Đài - Ảnh 1.

The Chinese government has viewed semiconductors as one of the key focuses for the Made in China 2025 plan, an initiative aimed at pushing the production of higher value products. China aims to produce 70% of semiconductor demand by 2025, and this plan is backed by billions of dollars of government investments.

According to analysts, the most important reason is that recently the US government threatened to stop providing products from the US to important Chinese technology companies such as Huawei and ZTE reinforce the focus of Beijing in promoting their domestic chip industry.

However, according to Taiwanese analyst Fubon Research: " SMIC is still lagging behind for years compared to those who are leading the industry with limited profit margins ."

The reason for that is because of the new chip that SMIC is just starting to produce from the first quarter of this year. These are 14nm process chips, chip processing technology has been around for years, while leading competitors such as TSMC and Samsung are turning to 7nm, smaller and more powerful process chips.

Analyst China Renaissance estimates that SMIC is following TSMC for 17 quarters when they are still releasing 14nm and 16nm chips.

Ngay cả hãng gia công chip lớn nhất Trung Quốc đại lục vẫn thua kém cả chục năm so với các đối thủ hàng đầu của Mỹ, Hàn, Đài - Ảnh 2.

If Chinese chipmakers can't produce the latest process chips, that means companies like Huawei, which design chips themselves, will have to look to rival vendors to process chips. For example, the Kirin chips designed by Huawei for their smartphones use the 7nm process and are being produced by TSMC.

Semiconductor manufacturers all need a huge amount of investment, talented engineers and highly specialized to produce chips. Chinese companies need to overcome these obstacles to challenge their rivals.

Narrow the gap

But some analysts think SMIC can keep up with their rivals thanks to a number of factors. According to China Renaissance, one reason is that the pace of shrinking chips has now slowed, which may allow SMIC to close the gap with its leading rival.

Ngay cả hãng gia công chip lớn nhất Trung Quốc đại lục vẫn thua kém cả chục năm so với các đối thủ hàng đầu của Mỹ, Hàn, Đài - Ảnh 3.

Research firm also said that Liang Mong Song, one of the co-CEOs of SMIC and former head of TSMC's R&D department, has stated that he has upgraded the company's " technology execution " capabilities since when taking office in late 2017.

In addition, recently, TSMC had some production problems, which could help Chinese firms. In January, a TSMC chip production line was contaminated with chemicals that disrupted production.

In addition, the trade war between the US and China as well as Beijing's determination to localize chip manufacturing can also strengthen SMIC.

According to an International Research and Strategy Center report, only about 16% of China's semiconductor needs are produced domestically, of which only about half of them are made by firms. China. However, it is a sign that this rate may change in the future.

According to reports from the organization in SEMI semiconductor industry, China's semiconductor manufacturing capacity is growing fastest in the world. However, experts also told CNBC that China will need at least a decade to close the gap with other countries in chip manufacturing.

Refer to CNBC

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Source : Trí Thức Trẻ