China's chip industry is experiencing a remarkable growth spurt. But how well do we truly understand the breathtaking pace at which Chinese manufacturers like SMIC and Huahong are closing the gap with their Western rivals? Here's a visual comparison of semiconductor technology development by market leaders such as IBM, Motorola Solutions, Intel Corporation and TSMC since 1978. The chart contrasts their progress with the achievements of Chinese companies.
The semiconductor industry in China faced a widening technological gap, reaching 17 years by 2014. This year marked a turning point, as China's State Council identified the semiconductor industry as critical to national security in its "Outline for Advancing the National Integrated Circuit Industry". The launch of the national "Big Fund" and the "Made in China 2025" initiative one year later provided resources and direction for Chinese companies to begin (very) successfully closing the gap.
Building on a similar plot published by Center for Security and Emerging Technology (CSET) already in 2021, I verified and corrected release dates for some technology nodes, incorporated the latest global forecasts for sub-3nm nodes, and updated the progress of Chinese CMOS foundries in 14-nm and 7-nm.
Here's the exciting part! Here are my predictions for the Chinese chipmaking sector. I strongly believe that China, particularly Huawei, might still be well-positioned to announce a new 5-nm chip fabricated entirely by SMIC, as its manufacturing could require utilization of tools the Chinese chipmakers already have. However, achieving high-volume production at a profitable level might be challenging due to the process complexity associated with using older-generation deep ultraviolet lithography (DUVL) tools. In fact, the same challenge applies to the recently announced Kirin 9000s chip, designed by Hisilicon and manufactured entirely in China.
As, in my opinion, we (Western nations) are about to lose the battle for mature node (14-nm and older) production, the only thing that undeniably hinders China's progress in developing state-of-the-art CMOS nodes (3-nm and beyond) is the U.S. embargo on advanced extreme ultraviolet lithography (EUVL) equipment exports from ASML (Netherlands) and Canon Inc. (Japan). My current estimates suggest that China currently lags behind the leader in developing advanced lithography tools by about 15 years. In this case, catching up could take even longer, potentially 20 years or more. However, Chinese companies are rapidly closing the gap (5-10 years) in other segments of the advanced chip-making value chain, including design software, wafer processing tools, and packaging technologies. Only time will tell how China navigates these challenges. Perhaps SSMB-EUV technology, developed by the brilliant minds at Tsinghua University, could offer a potential remedy.
Author: Michał Bochenek