China is flexing its muscles. West wipes tears of laughter
According to the latest reports, Chinese semiconductor manufacturers plan to increase their production capacity in 7 nm and 5 nm lithography by up to five times over the next two years. The aim is to meet the growing demand from the domestic AI sector, which has been developing at a very fast pace in recent quarters. The problem is that companies from the Middle Kingdom operate without access to the most modern machines from Europe.
TSMC, Intel and Samsung can sleep peacefully for a long time
Currently, production in 7 nm and 5 nm technology is less than 20,000 wafers per month. The ambition is to reach the level of approximately 100,000 wafers per month within a year or two. The long-term plan assumes further expansion of power in the most advanced nodes by up to an additional 500,000 wafers per month by 2030.
We are talking about SMIC here, the only manufacturer offering such nodes in China. The company is expanding its factories in Shanghai, Shenzhen and Beijing, but one of the presidents admitted that some of the machines already purchased will not be put into operation this year because there is a lack of complementary equipment necessary to build complete production lines.
Despite this, the company plans to further increase its overall production capacity, but many analysts assume that most of the new capacity will go to older technological processes that are better mastered by the Chinese and are still in high demand – e.g. in household appliances.
In the case of more archaic solutions, Hua Hong Semiconductor should also be mentioned. The company is developing production in 28 nm and 22 nm, and technological support will be provided by Huawei. In parallel, Huawei-related entities are building pilot lines and research facilities, targeting processes below 10 nm.
It looks good on the surface. However, the largest foreign competitors such as TSMC, Intel or Samsung not only have much larger production capacities, but also operate on much newer 3 and 2 nm class lithography. Thus, it is clearly visible that the Middle Kingdom, despite the theft of intellectual property, bribery of specialists and billions of government grants, is still many years in arrears.
