The US is taking action to stop China’s semiconductor industry from utilizing cutting-edge chipmaking equipment, which might have an effect on American, South Korean, and Taiwanese businesses doing business in the area.
It remains to be seen if this will have the intended effect on China’s aspirations in the semiconductor industry.
The majority of analysts predict that China’s top IT businesses will shortly report their worst-ever quarterly earnings after being severely impacted by governmental crackdowns and problems with industrial output caused by lockdowns.
The country will find it more difficult to weather the economic storm as a result, but the Chinese government’s ambition for technical self-sufficiency faces a more urgent challenge that needs to be resolved.
According to Bloomberg, the US is placing tighter limitations on chip manufacturing equipment supplied to Chinese foundries.
This modification is the result of remarkable developments achieved by Chinese businesses in the production of NAND and DRAM as well as sophisticated logic components like CPUs and GPUs.
As an illustration, Yangtze Memory Technologies Co (YMTC) is already a large-scale producer of 128-layer 3D NAND that can match the performance of comparable products from Samsung, SK Hynix, and Micron.
Although such businesses can create quicker and higher-density NAND, Apple is thinking about employing YMTC NAND for the iPhone 14 base model.
Zooming out, China is setting an example for the rest of the world by constructing more chip manufacturers, progressively lowering the number of chips it must import each year.
China purchased more than 232 billion chips worth over $174 billion in the first five months of 2022.
The Chinese government is considering abolishing import duties on components and machinery for high-tech manufacturing until 2030 in response, and local foundries are receiving large subsidies to increase capacity as soon as possible.
Chip foundries in China have a 10-year cost of ownership that is almost 40% less than foundries in the US.
Analysts predict that 12 new factories will be up and running in the US by 2025, compared to up to 31 in China.
To read our blog on “Intel manufactured chips will be used in MediaTek’s smart edge devices,” click here.