The export ban on semiconductor equipment sent to China has restricted access to advanced tools needed to produce next-generation semiconductors. As a result, China continues to invest and expand its mature processes like 55 nm, 40 nm and 28 nm technologies, according to new research from TrendForce.
New export restrictions were put in place by the Netherlands late in June 2023 and with the U.S. and Japan already imposing restrictions, semiconductor equipment sent to China is being severely hindered. Technologies such as photolithography, deposition and epitaxy will be subject to export restrictions causing the country to focus more on mature process technologies.
However, TrendForce forecasts Chinese foundries’ 12 inch wafer production capacity will likely increase from 24% in 2022 to about 26% in 2026. If exports of 40/28 nm equipment receive approval, the market share could expand even further by as much as 28% by 2026.
Delays likely
TrendForce said the U.S. export restrictions are primarily aimed at limiting the growth of advanced processes rather than mature ones. This includes equipment used in 45 nm and below.
Because of this, mature processes ranging from 45 nm to 28 nm could potentially require export authorization as well. This may mean Chinese foundries will face a lengthy equipment review process and delay expansion plans of mature processes at the 40 nm and 28 nm processes.
Restricting sales
Earlier this year, the U.S. stopped approval of export licenses for companies looking to do business with Chinese electronic equipment vendor Huawei. The move was the latest in a series of moves to block the company from receiving advanced tools to produce advanced process technologies such as those being manufactured by TSMC, Samsung, Intel and GlobalFoundries.
Following adding Huawei to the Entity List in 2019, the U.S. government added SMIC to the Entity List in 2020 restricting sales of critical electronics for the manufacturing of semiconductors in the country. The move severely limited what SMIC could produce in the future, and SMIC was investing to develop its own in-house technologies.
In October of 2022, the USDOC expanded restrictions on high-performance computing such as CPUs and GPUs back in October of 2022, which includes not only domestic companies in mainland China but also U.S.-based suppliers and U.S. citizens from helping support China’s chip development.
Due to these restrictions, DRAM makers that have fabs in China such as SK Hynix and Samsung have considered selling their fabs because they can’t get access to the latest technology. However, SK Hynix said it may expand legacy processes at its Wuxi, China, fab instead of transitioning to more advanced processes.
