Monitoring Desk
ISLAMABAD/SHANGHAI: China’s semiconductor industry has become a primary target of the United States (US), which has imposed a slew of export restrictions targeting many parts of Beijing’s chip sector supply chain in a bid to slow down its rival’s technological advancement.
Beijing has invested vast sums of money into cultivating a domestic chip industry; however, its fabrication plants, known as fabs, still heavily rely on foreign-made equipment that is used to turn slabs of silicon into chips that power hardware.
SMIC: China’s largest contract chipmaker
Semiconductor Manufacturing International Corporation (SMIC), China’s largest fab, makes chips for a wide range of products for the automotive sector, internet-of-things devices, and smartphones.
Founded in 2000 with the backing of the China government, the firm stands as China’s would-be rival to Taiwan Semiconductor Manufacturing Co Ltd (TSMC), though it is dwarfed in technology. TSMC is the global most valuable chipmaker and counts Apple Inc and Nvidia Corp among its major clients.
Its government backing and ambition to make the high-end chips caught the attention of the United States (US), which put the firm on its Entity List in 2020. This placement effectively barred Dutch firm ASML Holding AS (ASML.AS) from providing critical Extreme Ultraviolet lithography machines to SMIC, scuttling that ambition.
Till date, most of SMIC’s sales have been made using the outdated 45-nanometer process node and above. Since late 2020, this specialization in older chips has proven a boon due to a global shortage of lower-end chips.
