Tightened sanctions from the USA, Japan and the Netherlands, which are the world leaders in the lithography equipment market, are forcing Chinese semiconductor manufacturers to increasingly turn to their compatriots for such products, and the share of Chinese equipment in the core Chinese market reached 47.25% August this year.
These statistics are at least cited by analysts at Huatai Securities, who studied the terms of 182 competitive purchases of chip production equipment by Chinese companies operating in this area. If we look at the period from July to August this year, the proportion of tenders won by Chinese suppliers reached 62%, almost doubling the figure from March to April, which was 36.3%. Essentially, this trend shows the willingness of Chinese chipmakers to purchase domestic equipment in the face of increasing external sanctions.
As explained Reuters According to industry officials, before sanctions were imposed, Chinese chipmakers preferred to use imported equipment and purchased domestic equipment in small quantities mainly for experimental purposes. Under the threat of tightening sanctions, a domestic replacement for virtually every device is now being sought and, if available, purchased immediately to eliminate the risks associated with the sanctions.
According to CINNO Research, sales of the top ten lithography equipment suppliers in China grew 39% year-on-year in the first half of the year, reaching $2.2 billion. Initially, Chinese companies still tried to buy alternatives to American equipment in Japan and the Netherlands, but as they consolidated the sanctions efforts of US allies, this opportunity is being missed.
Chinese equipment suppliers are trying to live up to the expectations placed on them. For example, AMEC’s silicon wafer etching equipment is already used to process products manufactured using advanced 5nm technology. Local experts estimate that Chinese chip-making equipment is improving faster than expected – about two years ahead of schedule. However, the weak point of Chinese suppliers so far has been the production of devices for optical lithography. In eight months this year, only one competition to supply such equipment was won by a domestic company in China. At the same time, imports of lithography equipment from the Netherlands increased by 81.2% to $3.3 billion over the same period. In the third quarter, deliveries of products from the Dutch company ASML to China accounted for up to 50% of sales.
It is generally accepted that the Chinese SMIC is starting the production of 5nm HiSilicon Kirin 9000S processors for the latest Huawei Mate 60 series smartphones with not so advanced ASML-DUV equipment, supplemented by complex technological equipment , was unable to launch due to its inability to purchase advanced EUV equipment since 2019. Some sources believe that SMIC managed to purchase a small number of advanced ones even before the introduction of sanctions by the Dutch authorities in 2019 ASML-EUV scanner to purchase. In any case, it will take several years for Chinese companies to develop full-fledged domestic analogues of these devices.