There is an indirect rule by the Chinese government that the fabs in the country should use 70 percent of domestically produced tools for the growth of the industry.
The ‘China Plus One’ strategy coupled with USA’s strong export restriction of key semiconductor technology has charged up China to strengthen its own semiconductor manufacturing equipment globally. Although China is undertaking strenuous efforts to boost its semiconductor industry, industry insiders have revealed that there are still a lot of challenges, which are still a barrier to grow the industry in China.
China’s leading chip equipment firms such as AMEC and NAURA are in talks with the domestic foundries and encouraging them to use in-house manufactured equipment. Sources, who wished to be unnamed also revealed that there is an indirect rule by the Chinese government that the fabs in the country should use 70 percent of domestically produced tools for the growth of the industry.
Around 15 percent of self-sufficiency has already been achieved by China in some of the key items such as silicon wafers, photomasks, photoresists, electronic gases, and wet chemicals. On the other hand, the self-sufficiency rate below 15 percent includes EDA, photolithography equipment, and photomasks. In an interaction with the local media, Gerald Yin Zhiyao, the CEO and Chairman at AMEC said that by the end of Q2 this year, China will have a good sufficiency rate in production of semiconductor equipment amid the challenges of reliability and quality.
Media reports also added that Chinese premier Xi Jinping clearly told the Prime Minister of Netherlands that ASML is not required in China, which is considered to be the top lithography tool maker. China has a 20 percent market share in the manufacturing of chipset making equipment, with tools comprising less than one percent. ASML, on the other hand, has 93 percent market share globally.
Sources further revealed that China is going to face a tough competition in the semiconductor market unless they quickly do something to produce the sophisticated lithography tools. The tensions reached such a high extent that executives in some semiconductor companies are asking their workforce to focus on 3D packaging and legacy chips instead of working on the cutting edge of processing nodes. For instance, Huawei is supposedly constructing a gigantic R&D center for lithography and fab equipment, while the other companies in China are experimenting with RISC-V.
