The semiconductor industry in China appears to be on the verge of a significant advancement, as recent reports indicate that SMIC (Semiconductor Manufacturing International Corporation) is testing its first in-house Deep Ultraviolet (DUV) lithography machine.
China’s Aspirations in Chipmaking Drive In-House DUV Development to Satisfy AI Market Needs
The surge in semiconductor demand within China can largely be attributed to the rapid growth of domestic AI companies aiming to develop innovative computing technologies. To fortify this momentum, the Chinese government is actively encouraging major industries to pivot towards self-sufficient production capabilities. According to a report by the Financial Times, SMIC is experimenting with DUV lithography equipment developed by the Shanghai-based startup Yuliangsheng. If these trials are successful, it could represent a pivotal moment for China’s ambitions in advanced semiconductor manufacturing.
Traditionally, SMIC has depended heavily on the Dutch company ASML for its lithography machinery. However, due to current US export restrictions, SMIC can only access older DUV technology, such as early-immersion DUV, which has enabled them to achieve production capabilities down to 7nm. This dependency, coupled with limitations in advancing production using Western technologies, has necessitated a shift towards domestic solutions. Presently, SMIC is focusing on testing 7nm production with Yuliangsheng’s DUV machinery.
There are claims that these domestic DUV systems could potentially enable production down to 5nm as well, although they currently grapple with alarmingly low yield rates. This challenge arises due to the intricacies associated with achieving such small node sizes using deep ultraviolet techniques, necessitating multiple patterning processes that can lead to accumulated alignment discrepancies and, consequently, diminished yields. Nevertheless, given that the primary objective for Chinese semiconductor manufacturers is to enhance production capacities, SMIC may be prepared to accept lower yield rates, as has been the trend in the past.
China’s strategic push to boost chip production is fundamentally driven by escalating demand within the AI sector. Recent reports suggest that manufacturers aim to exponentially increase their output of AI chips to meet market needs.
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