How China is Countering U.S Sanctions
In recent years, the U.S has been progressively restricting the ability of Chinese companies to purchase Advanced chip making Technologies in a concerted attempt to throttle the countrys indigenous semiconductor industry. However, we have seen systematic progress reports on new chip Technologies and it would appear that China may have cracked the code on countering U.S sanctions. In fact, one could even argue that the ensuing restrictions on Chinas chip access have provided the impetus for indigenous exploits in the chip sector.
Made in China 2025 Plan
Since the launch of Beijing’s Made in China 2025 plan in 2015, Chinese firms have achieved varied degrees of progress across the semiconductor ecosystem. At this point, it is probable that China will break free from the U.S Chokehold, in short order with its ship industry faring little worse. According to the Brookings institution, Chinese businesses now account for 20 percent of the world’s fabulous chip, design houses and 10 percent of total Global chip making capacity. According to semiconductor industry, Association data Chinas, nine percent share of global chip sales in 2020 places ahead of Taiwan, and only behind the 10 held by both the EU and Japan in 2020.
U.S Restriction on Semiconductor Technology
The administration of President Donald Trump prohibited Taiwanese semiconductor manufacturing company, Co and Samsung from producing sophisticated semiconductors for Chinese businesses on the entity lists such as Huawei. Last year, U.S President Joe Biden’s Administration announced the high performance Computing chip. Exports from the US to China would require approval sales of semiconductor manufacturing equipment to China that can be used to produce logic, chips at or below the 14 or 16 denominator. Technology, node dram chips with a half pitch less than or equal to 18 nanometers and nand chips with 128 or more layers would also require approval and all U.S citizens or permanent residents working for U.S companies would require approval.
Effect of Restriction on China’s Technological Advancement
Washington’s restriction on high end computer chip, exports to China may hinder the latter’s technological advancement in advanced sectors, it also eliminates all foreign rivals, leaving the equivalent market segment wide open to China’s domestic high end computer chip businesses. Prior to the restriction it might have taken local enterprises at least 10 years to catch up and build a presence in the industry due to inferior technology.
Impact of Restriction on Chinese Chip Users
Chinese customers of high end Computing chips now have little choice but to test drive homegrown chips, despite the fact that their quality and performance are far from cutting edge. As a consequence, the time required by these local firms to produce competitive world class products might be cut by 30 to 50 percent. In other words, the U.S restriction on semiconductor technology compels Chinese chip users to hasten the process of substituting indigenous goods for imported ones.
Introduction
The Chinese government has implemented an import substitution program, which has resulted in the prohibition of the sale of lithography equipment that produces chips with nodes higher than 14 or 16 nanometers. Despite this, Chinese companies have found a way to produce higher resolution circuit structures using a lower resolution photo lithography machine. This technique is known as multi-patterning and has been demonstrated to be technologically viable.
Multi-Patterning
Multi-patterning is a more expensive process due to the use of multiple masks and has a lower yield rate. However, for Chinese IC companies that require access to advanced technology node fabrication processes but have no other options, it is an acceptable compromise. Chinese IC design firms are also attempting to build more novel chip architectures and circuit designs that might allow chip capabilities previously only attainable with higher end manufacturing techniques using just lower end fabrication procedures.
Chiplet Packaging Technology
One such strategy is to use chiplet packaging technology to reduce communication latency and power consumption between chips in a multi chip system. This increases system or application performance and power consumption. Shanghai Bear in Tech introduced the BR 100 chiplet based graphics processor chip in August of last year, claiming three times the performance of a similar product from a prominent US business.
Fiber Optic Breakthrough
Chinese military sector engineers have also claimed a crucial breakthrough in producing fiber optic.
China’s Growing Missile Arsenal
China’s missile arsenal is growing rapidly, thanks to the development of a low-cost, fiber optic gyroscope that can be mass-produced at a computer chip manufacturing plant. According to a study team led by Mao Yushing, a senior engineer of the Aviation Industry Corporation of China’s Xian Flight Automatic Control Study Institute, the gyroscope will accelerate the delivery of tactical missiles and other guided weapons to China’s military arsenal.
Graphene Chip Technologies
China has also been investing in graphene chip technologies. These devices can operate at astronomically high rates of 5001.00.00.00 GHz, which is 10 times quicker and more powerful than silicon circuits, but also more efficient and use less electricity. China’s goal is for local semiconductor manufacturers to transition to graphene technology by 2025.
Sub 14 Nanometer Devices
China is committed to focusing on the development of semiconductor manufacturing technologies less advanced than 14 nanometers, as well as chips created using such processes in the next few years. However, there are indications that China is already well on its way to developing sub 14 nanometer devices. Semiconductor Manufacturing International Corp (SMIC), China’s largest contract chip maker, seemed to successfully create 7nm chips last year.
Huawei Technologies
Yet a lack of clarity about the accomplishment has raised concerns about whether the production is economically viable. SMIC is not the only Chinese business boasting similar achievements. Huawei Technologies, which has been subject to the most stringent US sanctions, applied for a patent for lithographic technology late last year, which is important for developing sophisticated semiconductors.
China’s Growth Plan Poses a Danger to Taiwan and Other Nations
China has a realistic and sustainable growth plan, but it poses a danger to Taiwan and other nations. This is because the methods used to create more than 90 percent of the world’s chips are the same ones being used by China. The fear is that, once China has mastered the technology and business logic in this category, it will leverage the magnitude of its local market to acquire global domination, repeating the same process of market cleaning that occurred earlier in the solar panel LCD and lithium battery Industries.
China’s Ability to Transform Fledgling Sectors
Though China is currently living behind the world leaders in chip technology, it has demonstrated throughout time that it can transform fledgling sectors into juggernauts, whether in High Speed Rail, telecommunications, electric cars or social media. If U.S penalties on Huawei or any indicator Bidens chip controls are bound to fail.
The Embargo Provides an Impetus for Beijing
While the Embargo appears to be onerous, it provides an impetus for Beijing to gather local technical know how, raise hundreds of billions of dollars and build a supply chain to rocket and undervalued semiconductor ecosystem to new heights.
Measures Too Little Too Late to Halt China’s Advance
Alas, the new measures are too little too late to halt China’s advance.
