Focus on the production of new product processes of 28nm and above. The goal is to achieve a monthly production capacity of 40,000 12-inch wafers, and production is expected to start in 2022. The estimated new investment in the project is US$2.35 billion, equivalent to approximately RMB 15.3 billion.
In the three major links of chip design, manufacturing, and packaging and testing, “manufacturing foundry” has always been an industry shortcoming in the mainland. According to the research data of Ximou, in 2020, the output value of China’s chip design industry will reach 44.2 billion U.S. dollars, and this figure will exceed 100 billion U.S. dollars in 2025, with a compound annual growth rate of more than 20%.
However, in the field of chip manufacturing foundry, China’s capacity demand in 2020 is equivalent to about 2 million 8-inch wafers per month, while the capacity supply is only 1.5 million per month, and the gap is still expanding.
According to IC insight data, Compared with the global chip manufacturing giant TSMC’s production capacity of 2.7 million pieces/month, SMIC’s monthly production capacity is only about 400,000 pieces, ranking No. The second Huahong Semiconductor has only about 220,000 pieces, and expansion of production capacity is a top priority.
In addition to the capacity gap, advanced manufacturing processes are a greater challenge.
With the gradual failure of Moore’s Law, the manpower and material resources required for the research and development of advanced chip processes have increased exponentially. For example, in January this year, TSMC announced that the company’s capital expenditures will increase to 28 billion U.S. dollars in 2021, a record high. Of this 28 billion US dollars, about 80% of the capital budget will be allocated to advanced process technologies, including 3nm, 5nm, and 7nm.
The skyrocketing R&D investment has also led to more and more foundry companies announcing their withdrawal from the competition track. As early as 2018, GlobalFoundries, the world’s second-largest chip foundry, announced its withdrawal from 7nm process development and shifted resources to more mature 14nm and 12nm processes. In recent years, Intel has continued to encounter many challenges in the advancement of 7nm technology.
At present, only TSMC, Intel, and Samsung are still working on the advanced technology track in the world.
SMIC’s 28nm, 14nm and other technologies are already relatively mature, but since being added to the list of entities by the United States, the development of 10nm, 7nm, and more advanced process nodes has been significantly hindered.
However, even if the United States relaxes technological restrictions, the progress of the domestic chip manufacturing process cannot be controlled by a single company SMIC. The research and development of advanced chip technology requires the cooperation of the entire industry chain such as semiconductor equipment, materials, and EDA tools. At present, there are still many gaps in these fields in my country, and the road to domestic substitution is long and long.
Whether it is global or domestic, the current industry capacity gaps are mostly concentrated in mature processes such as 28nm, and advanced processes such as 7nm and 5nm only have consumer electronics such as mobile phones and GPUs or cloud server cores.The demand for tablets is greater.
Chen Hang, chief analyst of Founder Securities’ technology industry, believes that SMIC’s first priority is to ensure the safe and controllable supply of domestic chip production capacity. The second city maintains the normal operation of stock production capacity. As for breakthroughs in advanced technology, it is not the company. Within the individual’s reach, it is necessary to work together with semiconductor equipment, materials, and IP/EDA manufacturers in the United Nations to make a breakthrough in a systematic project.