Export controls not working on semiconductor equipment to China.

"Huawei has been able to scoot around TSMC's weak end customer checks and secure thousands of leading edge wafers through Bitmain / Sophgo, and many other established Chinese design firms. While this is a huge failure in enforcement of the export controls, it's also relatively low volume compared to domestic fabrication of the Ascend 910B. Huawei has been relying on primarily Semiconductor Manufacturing International Corporation (SMIC) to produce their domestic AI chip and they have run tens of thousands of wafers of the main compute chiplet on their domestic SMIC N+2 (~7nm) and N+3 (~6nm) process nodes."

"SMIC produces 7nm-class chips including the Kirin 9000S mobile system-on-chip (SoC) and Ascend 910B AI accelerator. Two of their fabs are connected via wafer bridge, such that an automated overhead track can move wafers between them. For production purposes, this forms a continuous cleanroom and effectively one fab. But for regulatory purposes, they are separate! One building is entity-listed by the US and working on advanced logic for AI chips, a clear national security concern. The other is free to import 'dual use' tools as it runs only 'legacy processes.' Do you believe they aren't sharing anything over the wafer bridge?"

"An isotropic etch chamber, essential to producing the latest 2nm Gate-All-Around transistors, cannot be exported to China from Lam's US factories. This same etch chamber, manufactured in Lam's Malaysia facility, can legally be sold to an advanced logic fab in China if no US persons are involved (in manufacturing, sales, installation, and servicing). This includes even customers on the US entity list. Other companies follow the same playbook, including Applied Materials & KLA with their Singapore facilities."

"ChangXin Memory Technologies (CXMT)'s advanced DRAM with 18nm half pitch was subject to the original 2022 export controls. A new method of calculating half-pitch in the 2023 rules put them back above the minimum line for controls. Without changing the underlying process, they went from restricted to not. They also changed the node name from 17nm or 18.5nm to 19nm, to avoid any appearance of impropriety. The subtleties of the rule change that so specifically moved them from under to a literal nanometer or two over the restriction are, at least, very fortunate for CXMT. Lobbying efforts by giants such as Applied Materials who has made over $3 billion from CXMT may be noteworthy."

"Pengjin High-Tech, a gallium nitride (GaN) startup that is not entity-listed, is building its cleanroom across the street from entity-listed advanced logic producer Peng Xin Wei (PXW). Pengjin is free to import nearly all advanced Western production equipment, including equipment critical to producing advanced logic at 7nm or below (again the exceptions are a small number of tools on the control list, including extreme ultraviolet (EUV))."

Fab whack-a-mole: Chinese companies are evading US sanctions

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