Chip giant SMIC is included in the entity list by the United States

SMIC originally planned to mass-produce the 10nm process in 2021, and the 7nm process is targeted to enter mass production in 2023. This schedule may be re-planned.

On December 18, local time, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced the addition of Chinese semiconductor manufacturing company Semiconductor Manufacturing International Corporation (SMIC) to the Entity List to limit its ability to acquire key U.S. technologies. Previously, SMIC has been listed as a “military end user” by the US Department of Defense.

The Commerce Department said the Commerce Department’s Bureau of Industry and Security added China’s Semiconductor Manufacturing International Corporation (SMIC) to the Entity List, a move to protect U.S. national security. Commerce Secretary Wilbur Ross said the administration could presume a denial of a license to prevent SMIC from acquiring technology to produce advanced semiconductors of 10 nanometers or less.

After SMIC was placed on the Entity List, U.S. exporters had to apply for a license to sell to the company, the Commerce Department said, limiting SMIC’s ability to acquire certain U.S. technology.

In addition to Semiconductor Manufacturing International Corporation (SMIC), the Commerce Department’s website says BIS has added more than 60 other companies to its “entity list” that it claims have acted “contrary to U.S. national security or foreign policy interests.”

SMIC has yet to respond to this news.

In response to the US technology blockade, my country is also accelerating its support for the technology sector. On December 18, the Central Economic Work Conference emphasized that “strengthening the national strategic scientific and technological strength” should be the first of the eight priorities of next year’s economic work. National team role.

The previous day, the Ministry of Finance, the State Administration of Taxation, the National Development and Reform Commission, and the Ministry of Industry and Information Technology jointly issued a major policy, which will give tax incentives to the integrated circuit and software industries.

In recent years, the U.S. government has frequently used the Entity List, which currently includes more than 275 companies and affiliates in China, to target key Chinese industries, including Huawei Technologies Co., Ltd. and 150 affiliates, ZTE, and Hikvision, among others. have been included in the Entity List.

What is the impact on SMIC?

Since 2019, many Chinese technology companies such as Huawei and Hikvision have been included in the entity list by the United States, and SMIC, the leading chip foundry in mainland China, has also been sanctioned. In October this year, SMIC was included in the U.S. export control by the Bureau of Industry and Security of the U.S. Department of Commerce. Some U.S. equipment, accessories and raw materials exported from the United States to SMIC must apply for an export license in advance. , to continue supplying.

On November 12, Zhao Haijun, co-CEO of SMIC, said at the third-quarter results meeting this year that the delivery of some of the company’s U.S.-made equipment parts and raw materials has been delayed. He reiterated that SMIC only provides products and services for civilian end users and does not have any military end users.

SMIC’s equipment and materials for chip foundry are inseparable from American manufacturers. At the performance meeting, Zhao Haijun said that whether it is an 8-inch or 12-inch wafer production line, mature technology (28 nanometer and above) or advanced technology (14 nanometer and below), there are many equipment related to American suppliers. expansion will have an impact. The company currently has expansion plans for projects in Shanghai and Beijing.

U.S. export controls will have a more pronounced impact on SMIC’s advanced manufacturing process. According to a Caixin report, a person in the U.S. semiconductor industry analyzed that it may be difficult for SMIC to continue the business of advanced technology, “The 14-nanometer process will be very difficult, followed by 28-nanometer and 40-nanometer, and the earlier process dominated by 8-inch factories. With relatively less reliance on U.S. suppliers, it will be relatively easy to maintain operations.”

According to an analysis by Isaiah Research, a Taiwan-based semiconductor consultancy, tools for advanced processes usually contain U.S. technology, while tools for mature processes may be replaced by non-U.S. or local Chinese equipment, thus having a greater impact on advanced processes. SMIC originally planned to mass-produce the 10nm process in 2021, and the 7nm process is targeted to enter mass production in 2023. This schedule may be re-planned.

Just as SMIC was continuously suppressed by the United States, recently, there has been another turmoil within SMIC.

On December 16, SMIC announced that the company’s executive director and co-chief executive officer (CEO) Liang Mengsong intends to resign conditionally. At present, the company is actively verifying his true resignation wishes with Liang Mengsong. However, the announcement did not explain what “conditional” means. The day before (December 15), Jiang Shangyi, the former CTO of TSMC, returned to SMIC as the company’s executive director, vice chairman and member of the strategy committee, effective from that day.

According to previous official news from SMIC, the mass production of 14nm has been achieved, and the yield of the second-generation technology has also been greatly improved. It is a pity that Huawei HiSilicon, a major customer of the 14nm process that has just been mass-produced, was sanctioned by the United States, making it impossible for SMIC to continue to use US equipment to manufacture chips for Huawei HiSilicon after September 15.

It is worth mentioning that the United States did not kill SMIC, but blocked the American items necessary for the development of advanced semiconductor processes of 10 nanometers and below. This seems to mean that SMIC’s existing mature process and 14nm process technology may still be able to maintain normal operation.

China’s response: resolutely opposed!

At the regular press conference of the Ministry of Foreign Affairs held on December 18, a Reuters reporter asked a question about people familiar with the matter that the United States would blacklist dozens of Chinese companies. The news is true, this will be another strong proof that the United States has used state power to suppress Chinese companies, and China is firmly opposed to this!”

“We urge the US to stop its wrongful act of unreasonably suppressing foreign companies, and China will continue to take necessary measures to safeguard the legitimate rights and interests of Chinese companies,” Wang Wenbin said.

He also pointed out that the politicization of economic and trade issues by the U.S. violates the principles of market economy and fair competition it has always advertised, and violates international trade rules. It not only damages the legitimate rights and interests of Chinese companies, but also does not conform to the interests of U.S. companies. It will seriously interfere with the two countries and even The normal global scientific and technological exchanges and trade exchanges have caused damage to the global industrial chain, supply chain and value chain.

Speaking at the Asia Society on the same day, Chinese Foreign Minister Wang Yi noted that the U.S. sanctions list was expanding and called on Washington to stop its “arbitrary suppression” of Chinese companies. China and the United States should insist on replacing confrontational sanctions with dialogue and consultation. The unilateral sanctions by the United States have become “the biggest destabilizing factor for regional and global security.”

On the issue of U.S. sanctions against Chinese companies, Wang Yi said that he cannot accept the “law of the jungle” in which the world can return to no distinction between right and wrong.

Author: Yoyokuo