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China’s top chipmaker makes big tech leaps despite US sanctions

Semiconductor manufacturing International Corp (SMIC) has likely advanced its two-generation production technology, defying U.S. sanctions meant to halt the rise of China’s biggest chipmaker.

The Shanghai-based manufacturer is shipping bitcoin mining semiconductors built using 7-nanometer technology, industry watchers TechInsights wrote in a blog post on Tuesday. This is well ahead of SMIC’s established 14nm technology, a measure of manufacturing complexity in which narrower transistor widths help produce faster and more efficient chips. Since late 2020, the United States has banned the unlicensed sale to the Chinese company of equipment that can be used to make semiconductors of 10nm and beyond, which infuriated Beijing.

A person familiar with the developments confirmed the report, asking not to be named as they were not authorized to discuss it publicly.

The startling advances in the minimum wage raise questions about the effectiveness of the export control mechanism and whether Washington’s ability to thwart China’s ambition to foster a world-class chip industry at home and reduce dependence on against foreign technologies. It also comes at a time when US politicians have urged Washington to fill loopholes in its China-oriented restrictions and ensure Beijing does not supply crucial technology to Russia.

The restrictions have effectively derailed Huawei Technologies’ smartphone business by cutting it off from the tools to be at the forefront of the competition – but that company is now quietly making a renewed effort to develop its chipmaking acumen in-house.

Previously, SMIC said its core capabilities were at 14nm, two generations behind 7nm, about four years behind the most advanced technology currently available from Taiwan’s TSMC and South Korea’s Samsung Electronics. South. The company has been working with customers on technologies more advanced than 14nm as early as 2020, it said on an earnings call that year.

Blacklist

China’s MinerVa Semiconductor Corp, which is named as a SMIC customer in the TechInsights report, features a 7nm chip on its website and said mass production began in July 2021, without specifying the manufacturer. Independent analyst Dylan Patel was the first to rate the report.

Representatives for SMIC and MinerVa did not immediately respond to requests for comment.

The Donald Trump administration blacklisted SMIC about two years ago on national security grounds, citing the company’s ties to the Chinese military, an allegation the chipmaker has denied. Following Washington’s decision, U.S. equipment vendors were banned from supplying the Chinese company with “only necessary” equipment to produce advanced 10nm or larger chips without a license, although it’s unclear exactly. what the U.S. Department of Commerce has allowed domestic companies to sell. SMIC since.

U.S. Senator Marco Rubio and U.S. Congressman Michael McCaul have repeatedly urged the department to tighten minimum wage export control restrictions to bolster U.S. security and ensure China does not transfer technology to Russia and does not help Moscow escape sanctions.

“The Biden administration will continue to work to expand and strengthen our cooperation with allies and partners to ensure effective controls over semiconductor production so that we remain generations ahead of our competitors in advanced semiconductor technology. semiconductors,” a Commerce Department spokesperson said.

US President Joe Biden

SMIC said its blacklisted status hurts its ability to develop sophisticated technologies. The company’s capacity is severely limited by its lack of access to ASML’s extreme ultraviolet (EUV) lithography systems, which are needed to manufacture the most advanced chips that include 5nm and 3nm geometries. The Dutch company has not shipped a single EUV machine to mainland China due to US pressure on the Dutch government.

President Joe Biden’s administration at one point considered tightening restrictions around the minimum wage but ruled out any unilateral action to allow more time to negotiate with other trading partners. These talks have so far not borne fruit. However, Washington is pushing ASML to stop selling even less advanced equipment to China.

SMIC told analysts in mid-2020 that much of the equipment it has for 14nm chips can be used to make more advanced chips, and it is looking to develop more sophisticated technology to improve its profitability. — (c) 2022 Bloomberg SEC