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Analysys Mason: China 4 Years From Silicon Independence
Tobias Mann | Editor May 11, 2021 5:15 AM
China is speeding toward its target of 70% semiconductor self-sufficiency at a breakneck pace, setting the country on a trajectory to be a technical leader market-wide within one to four years, according to a recent Analysys Mason report.
Trade tensions between the U.S. and China have worsened during the past 18 months, effectively cutting off Chinese technology companies from foreign chip fabs and U.S. chipmakers like Intel.
Despite these challenges, China has made steady progress toward modernizing its semiconductor foundries. Semiconductor Manufacturing International Co. (SMIC) — the country’s answer to Taiwan Semiconductor Manufacturing Co. (TSMC) — is now producing chips based on a 14-nanometer manufacturing process and ramping production of 28-nanometer chips.
The latter is particularly important as most advanced chips used worldwide are currently built using either 28-nanometer or 40-nanometer processes, notes Caroline Gabriel, research director at Analysys Mason.
However, China’s semiconductor challenges are not technical, according to Gabriel. Several Chinese chipmakers, including HiSilicon, have designed leading-edge chips. Instead, China’s biggest challenge involves manufacturing, particularly at scale.
“The main Chinese foundries, SMIC and Hua Hong Semiconductor, are expected to achieve self-sufficiency in the 28-nanometer process technology this year,” she wrote. “This is now implemented at mass scale and China is poised to activate its first homegrown 28-nanometer lithography machine this year.”
What’s more, SMIC announced a new fin field-effect (FinFET) process, which claims to provide 57% lower power consumption and 55% smaller chips than those built on the aging 28-nanometer process. “The success of this process at scale will be critical to achieving China’s semiconductor ambitions in the next few years,” Gabriel wrote.
These chips are expected to achieve levels of performance similar to that of current generation 7-nanometer processors from competitors like TSMC, she added.
China Focuses on Semiconductor Growth Areas
While China faces significant challenges ahead, this pressure has only served to jumpstart the country’s semiconductor manufacturing ambitions, according to Analysys Mason.
“Progress is not only driven by the current geopolitical situation, but also by broader ambitions to be at the cutting edge of technologies that will transform society and the economy, such as 5G, AI, robotics, and green energy,” Gabriel wrote.
Three areas where China has already made significant progress toward technical leadership are in memory, artificial intelligence (AI), and IoT. Here China is between 12 to 18 months from becoming a market leader, the report found.
Where China has the most ground to make up is in cloud data center processors, accelerators, and 5G SoCs. Here, Gabriel predicts that China is between three and four years away from becoming a market leader.
Despite a high level of investment by companies like HiSilicon, Gabriel wrote that China is still reliant on advanced manufacturing processes not available domestically. Likewise, she notes that Chinese companies have made significant progress in the data center processor and accelerator space, but the pending acquisition of Arm by Nvidia has the potential to spoil things.
To mitigate this threat, Gabriel writes that China may adopt a new approach to semiconductor design altogether in order to “leapfrog” existing technologies. “Strong support for the open RISC-V processor architecture is an example,” she writes.
RISC-V has seen broad adoption among Chinese companies with Alibaba, Huawei, and ZTE already investigating the fledgling processor architecture. One advantage of RISC-V is its open source, which would allow China to sidestep trade restrictions, which have already limited access to critical U.S. semiconductor manufacturing technologies.
Looking forward, Gabriel anticipates China will reach self-sufficiency in some semiconductor markets within a year and be a market leader within four years.
Of course, China’s ambitions could be further accelerated by a return to international cooperation. This would, according to Gabriel, allow industries everywhere to take advantage of China’s innovations and allow Chinese companies to access new markets.
Tobias Mann | Editor May 11, 2021 5:15 AM
China is speeding toward its target of 70% semiconductor self-sufficiency at a breakneck pace, setting the country on a trajectory to be a technical leader market-wide within one to four years, according to a recent Analysys Mason report.
Trade tensions between the U.S. and China have worsened during the past 18 months, effectively cutting off Chinese technology companies from foreign chip fabs and U.S. chipmakers like Intel.
Despite these challenges, China has made steady progress toward modernizing its semiconductor foundries. Semiconductor Manufacturing International Co. (SMIC) — the country’s answer to Taiwan Semiconductor Manufacturing Co. (TSMC) — is now producing chips based on a 14-nanometer manufacturing process and ramping production of 28-nanometer chips.
The latter is particularly important as most advanced chips used worldwide are currently built using either 28-nanometer or 40-nanometer processes, notes Caroline Gabriel, research director at Analysys Mason.
However, China’s semiconductor challenges are not technical, according to Gabriel. Several Chinese chipmakers, including HiSilicon, have designed leading-edge chips. Instead, China’s biggest challenge involves manufacturing, particularly at scale.
“The main Chinese foundries, SMIC and Hua Hong Semiconductor, are expected to achieve self-sufficiency in the 28-nanometer process technology this year,” she wrote. “This is now implemented at mass scale and China is poised to activate its first homegrown 28-nanometer lithography machine this year.”
What’s more, SMIC announced a new fin field-effect (FinFET) process, which claims to provide 57% lower power consumption and 55% smaller chips than those built on the aging 28-nanometer process. “The success of this process at scale will be critical to achieving China’s semiconductor ambitions in the next few years,” Gabriel wrote.
These chips are expected to achieve levels of performance similar to that of current generation 7-nanometer processors from competitors like TSMC, she added.
China Focuses on Semiconductor Growth Areas
While China faces significant challenges ahead, this pressure has only served to jumpstart the country’s semiconductor manufacturing ambitions, according to Analysys Mason.
“Progress is not only driven by the current geopolitical situation, but also by broader ambitions to be at the cutting edge of technologies that will transform society and the economy, such as 5G, AI, robotics, and green energy,” Gabriel wrote.
Three areas where China has already made significant progress toward technical leadership are in memory, artificial intelligence (AI), and IoT. Here China is between 12 to 18 months from becoming a market leader, the report found.
Where China has the most ground to make up is in cloud data center processors, accelerators, and 5G SoCs. Here, Gabriel predicts that China is between three and four years away from becoming a market leader.
Despite a high level of investment by companies like HiSilicon, Gabriel wrote that China is still reliant on advanced manufacturing processes not available domestically. Likewise, she notes that Chinese companies have made significant progress in the data center processor and accelerator space, but the pending acquisition of Arm by Nvidia has the potential to spoil things.
To mitigate this threat, Gabriel writes that China may adopt a new approach to semiconductor design altogether in order to “leapfrog” existing technologies. “Strong support for the open RISC-V processor architecture is an example,” she writes.
RISC-V has seen broad adoption among Chinese companies with Alibaba, Huawei, and ZTE already investigating the fledgling processor architecture. One advantage of RISC-V is its open source, which would allow China to sidestep trade restrictions, which have already limited access to critical U.S. semiconductor manufacturing technologies.
Looking forward, Gabriel anticipates China will reach self-sufficiency in some semiconductor markets within a year and be a market leader within four years.
Of course, China’s ambitions could be further accelerated by a return to international cooperation. This would, according to Gabriel, allow industries everywhere to take advantage of China’s innovations and allow Chinese companies to access new markets.
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