China’s Chip Industry Braces for Further Sanctions With Concerns and Defiance – Crypto News

Among those already blacklisted, Yangtze Memory Technologies urged suppliers to show “integrity” and deliver machinery parts it had already purchased. “We can’t get the components, which we have bought legally,” said Nanxiang Chen, YMTC’s chairman and acting CEO. The company is China’s leading maker of flash memory chips. Such chips are essential in all kinds of electronic devices including computers and smartphones.

His comment was a rare public acknowledgment of the challenges YMTC has faced since being hit by US sanctions late last year.

In October YMTC was placed on the Commerce Department’s “unverified list” as a company of concern. It was affected, too, by US curbs on China’s chip sector, including restrictions on exports of any technology, tools or machinery that China could use to manufacture. advanced semiconductors.

The curbs also restricted the ability of “US persons” to support the development or production of some of the most cutting-edge chips in China. That led US makers of semiconductor-manufacturing equipment to withdraw employees who had been based at YMTC to maintain highly technicaltools.

In December, YMTC was moved to the Commerce Department’s “entity list,” meaning US exporters need to obtain a license before selling the company’s goods or services.

In his speech Thursday, the opening day of the three-day Semicon China semiconductor-industry conference, Chen also suggested that tool makers buy back some of the equipment they have sold to YMTC. He didn’t elaborate on how well YMTC is maintaining operations under the sanctions.

Blacklisting YMTC is intended to prevent China from developing technologies that might give it an edge in defense or other areas that Washington deems critical to national security.

More measures targeting China’s semiconductor industry are likely. The Biden administration is considering further restricting exports to China of chips used in artificial intelligence, The Wall Street Journal reported. The Netherlands published new rules last week saying Dutch semiconductor companies will have to seek government permission before they can sell certain types of chip-making tools abroad.

Meanwhile, China said Monday that it is putting export restrictions on gallium and germanium, two minerals the US says are critical to the production of semiconductors, missile systems and solar cells.

A frequent lament from the Chinese chip makers and researchers at the Shanghai event was that geopolitical tensions had ended a decadeslong era in which a global supply chain had grown and flourished.

Globally, semiconductor companies’ revenue will reach $573 billion in 2022, according to SEMI, a global semiconductor-supply-chain industry body that organizes the annual Shanghai event. That is expected to grow to $1 trillion by the end of the decade, SEMI said, fueled by demand for chips in cars and data centers and the rapid adoption of artificial intelligence across industries.

Whether the industry can keep up may depend on how geopolitical tensions play out. YMTC’s Chen said the sector had entered an “era of chaos and disorder.”

Employees at the exhibition booths of some Chinese tool makers called the US restrictions unfair, citing the monthslong process of seeking import licenses with no guarantee of success.

An executive from Semiconductor Manufacturing International, China’s biggest foundry operator, also on the US blacklist, warned that a slowdown in the country’s chip industry would weigh on the sector globally.

There was little visible sign of slowdown at Semicon, packed with visitors milling around some 1,100 exhibitors. SEMI forecasts that between 2022 and 2026, China will account for more than a quarter of the 96 new chip-fabrication plants or major expansions planned globally for commonly sized wafers of 200 mm and 300 mm.

Among the most popular booths were those of Naura Technology Group and Advanced Micro-Fabrication Equipment, or AMEC, China’s top makers of chip-manufacturing tools. Naura’s products include etching tools, which help carve circuit patterns onto a semiconductor wafer, tools to clean the wafer and PVD equipment used to deposit thin metal films. AMEC is also known for etching tools.

A noticeable presence at the exhibition were relatively new, smaller Chinese suppliers that said they are developing products to compete with those of dominant suppliers. Products included chip-testing tools, where the US’s KLA currently dominates, and chemicals.

Forum speakers as well as exhibitors said that while the American restrictions were painful, they also open opportunities for local players. If not for the restrictions, some local suppliers said, chip makers would not have considered using their technology.

“It’s not all bad for China, in that it could also give China a chance to develop,” said Tsinghua University professor Shaojun Wei, who specializes in semiconductors.