Tag: SMIC 5nm

  • SMIC Rises to World’s 3rd Largest Chip Foundry with Huawei’s Help

    SMIC Rises to World’s 3rd Largest Chip Foundry with Huawei’s Help

    Chinese chipmaker Semiconductor Manufacturing International Corporation (SMIC) has climbed to the third spot in the global foundry market by sales for the first quarter of 2024. This milestone was reached despite the ongoing trade restrictions enforced by the US government.

    Market Share and Financial Performance

    A report from tech research firm Counterpoint shows that SMIC captured 6% of global chip foundry revenue in Q1. This places them behind Taiwan Semiconductor Manufacturing Company (TSMC), which holds a dominant 62% market share, and South Korea’s Samsung Electronics at 13%.

    SMIC’s rise is largely due to its strategic pivot towards serving domestic clients such as Huawei. Financial data reveals that 82% of SMIC’s $1.75 billion revenue for the first quarter came from mainland clients. This is a notable increase from 75.5% in Q1 2023 and 80% in Q4 2023.

    Challenges and Controversies

    SMIC’s progress hasn’t been without hurdles. A teardown of Huawei’s Mate 60 Pro 5G smartphone last year showed the phone contained an advanced Kirin 9000s processor, which was reportedly made by SMIC. This discovery raised concerns in Washington and led to calls for an investigation into how such a chip could be produced in China despite US restrictions.

    Both SMIC and Huawei have remained silent on the issue, but the processor has become a symbol of China’s defiance against US sanctions on social media.

    The overall foundry market experienced a 5% revenue decline in Q1, according to Counterpoint. This downturn is due to a sluggish recovery in demand for non-AI semiconductors used in smartphones, IoT devices, and automotive applications.

    Conversely, the demand for AI chips continues to rise. Counterpoint analyst Adam Chang notes an increase in capital expenditure by cloud service providers and enterprises, reinforcing this trend. The robust demand for AI chips is expected to persist through 2025, contrasting with the slow growth in other sectors.

    Nvidia, a key player in the AI chip market, exemplifies this trend. Their latest financial report shows a remarkable 400% increase in revenue from the sale of graphics processing units (GPUs) to data centers in the quarter ending April 28th, 2024.

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  • SMIC’s 5nm Breakthrough to Power Huawei Mate 70 Processors

    SMIC’s 5nm Breakthrough to Power Huawei Mate 70 Processors

    SMIC has played a vital role in producing Huawei's Kirin chips, including the Kirin 9000S and 9010, both of which are fabricated using a 7nm process. The foundry is reportedly working on its own 5nm chip production technique.

    Milestone Achievement

    Recent reports from Business Korea and Hankyung indicate that SMIC has successfully reached this milestone, meaning their 5nm process is now prepared for chip manufacturing.

    This achievement is remarkable, especially given the infrastructure issues SMIC faces due to US export limitations. However, the reports highlight that SMIC's new 5nm node depends on the older Deep Ultraviolet (DUV) lithography rather than the more advanced Extreme Ultraviolet (EUV) technology.

    Lithography Technologies

    DUV lithography employs deep ultraviolet light with a wavelength of approximately 193nm to engrave circuit patterns onto silicon wafers.

    In contrast, EUV lithography utilizes much shorter extreme ultraviolet light (around 13.5nm). This shorter wavelength facilitates the creation of finer features, enabling the production of more powerful and efficient chips. Consequently, EUV is deemed essential for achieving the most advanced chip designs.

    The reason SMIC cannot adopt EUV technology stems from ongoing US-China tensions. ASML, a major supplier of EUV lithography machines, is barred by US export regulations from providing its technology to Chinese foundries like SMIC. Hence, SMIC must rely on DUV lithography for its 5nm node.

    Future Prospects

    Despite concerns about production yield, Huawei is expected to utilize processors manufactured using SMIC's new 5nm node in its upcoming Mate 70 series.

    Additionally, there are rumors of a new Huawei laptop featuring a Kirin chip designed for PCs that is purported to compete with Apple's M2 in terms of performance. Whether these rumors hold true remains to be seen.

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