In light of the fact that Chinese foundries can still obtain used equipment and consumables for process technology upgrades despite the US ban, the US could target advanced packaging for sanctions next, according to industry sources in Taiwan.
In response to the US' two-year prohibition on the sale of cutting-edge chip technology and equipment, Huawei has unveiled the Mate 60 Pro as a strategic step. The Kirin 9000S chip has attracted considerable market attention because to its utilization of SMIC's sub-10nm process, the sources indicated.
The chip developed by Huawei, a government-supported company, exemplifies its enduring strength and dedication to the progress of state-of-the-art methodologies and semiconductor architecture. This observation demonstrates the capability of Chinese foundries to procure necessary equipment and employ advanced chiplet packaging methods as a means to circumvent the limitations imposed by the EUV advanced process, the sources said.
There are several noteworthy aspects of Huawei's new phone strategy, according to the sources. During the US Secretary of Commerce's visit to China, Huawei made huge investments in promoting its latest smartphone. This included sending the phone to online outlets for product teardowns in order to reveal that 90% of Huawei's phones are localized. Furthermore, the purpose of this promotional campaign was to demonstrate that the US has not stifled China's advancement in the semiconductor industry, and that China is on the verge of achieving technological independence, said the sources.
Moreover, the Mate 60 Pro could be considered Huawei's magnum opus in light of the US ban and the decline in mobile phone sales, the sources noted. The introduction of the Kirin 9000S chip has also revealed the technological prowess of SMIC, a company that has refrained from disclosing revenue figures for its 14nm and more advanced process manufacturing, the sources said.
The sources continued that it is widely acknowledged that Liang Mong Song, co-CEO of SMIC, has substantially advanced the process development of the Chinese foundry. SMIC has attained mass production of its N+1 process technology, which is positioned between TSMC's 10nm and 7nm DUV processes, putting it ahead of Globalfoundries and UMC, according to the sources.
The Huawei Kirin 9000S is more likely to be manufactured using SMIC's N+1 process and multiple DUV exposures, the sources claimed. After disassembling the chip, it is evident that clock speed decreases, power consumption rises, chip size increases, and heat dissipation is poor. This is near to the physical limit, which ordinary foundries would not choose, the sources said.
SMIC, on the other hand, has been ordered to conduct OEM work for Huawei at all costs, the sources indicated. In other words, the more it produces, the more it will pay. Nevertheless, the foundry will be financially supported by the Chinese government, the sources said.
SMIC and Huawei are collaborating on semiconductor development, which demonstrates their readiness, along with that of the Chinese government, to confront the increased trade restrictions imposed by the US, according to industry sources.
First, according to the sources, the recent revenue growth of equipment manufacturers such as ASML and Applied Materials indicates that SMIC and others have stocked up on substantial quantities of supplies. ASML's DUV equipment, which is on the US-led list of restricted exports, will no longer be exported to China after the end of this year. There have been reports that organizations affiliated with Huawei and SMIC have engaged in global market penetration for used equipment through the use of intermediaries and the acquisition of equipment transferred from South Korean businesses.
Second, the Chinese government has reportedly prohibited the use of iPhones and other foreign mobile phone brands during official business hours. As the Chinese market is of utmost importance to Apple, the company must negotiate with the US government without delay, the sources said.
Lastly, China has formed an alliance among its domestic players to develop the Chinese standard ACC 1.0, with the intention of utilizing advanced packaging technologies such as chiplets to circumvent the limitations of advanced processes, the sources said. China's advanced packaging technology still trails far behind ASE, Amkor, and other major OSATs. However, China will advance with all of its strength and has a chance to break through if the US does not intervene.
Perhaps China's evaluations are accurate, but it's not as if the US is in the dark. The advanced packaging battlefield could be a target for the next round of US sanctions against China, according to the sources.
