HUAWEI CAN EASILY SKIRT US SANCTIONS, HK-BASED ANALYST ARGUES

A US ban on foreign companies’ sales of chips to Huawei Technologies if American equipment or software is involved will undermine America’s already-weakened position in the global semiconductor equipment market, industry sources say.

Chip fabricators will remove American equipment from production lines in order to maintain market share in China, the world’s largest purchaser of semiconductors, warned David Goldman in an analytical essay written for Asia Times on Friday, June 12, 2020.

Samsung, the world’s biggest fabricator of memory as well as logic chips after Taiwan Semiconductor Manufacturing Corp. (TMSC), already has set up a small production line for top-of-the-line 7-nanometer chips using only Japanese and European chip-making equipment, according to Electrical Engineering Times.

The Dutch firm ASML is the only provider of the Extreme Ultra-Violet (EUV) etching machines required to produce the tiny transistors on 7-nanometer chips, which can hold 10 billion transistors on a silicon wafer the size of a fingernail. Chip testing machines by Japan’s Lasertec sell for $40 million apiece and are rated the best in the market. Samsung and Huawei are considering a deal under which the South Korean giant would fabricate advanced chips for Huawei’s 5G equipment, and Huawei would in effect cede a substantial amount of its smartphone market share to Samsung. Huawei’s core business is telecommunications equipment.