U.S. Sanctions Bomb China's Bid To Make Advanced Chips

China may be rethinking its approach to the ongoing semiconductor wars with the US and looking to other ways to boost its chipmaking industry than simply trying to match Washington's costly investments and subsidies, Dan Robinson reported for The Register.

Photo Insert: Nvidia chips became collateral damage of US sanctions.

"Where China is today is that if it wants a cutting-edge semiconductor industry, it needs help from Western companies, but now there are export restrictions on such technology," said Andrew Buss, IDC Research director for the European Enterprise Infrastructure.

"Leading-edge chip fabrication is incredibly difficult. Even before the latest restrictions, China was struggling to build a competitive semiconductor industry."

This is particularly so when it comes to photolithography equipment such as that made by Netherlands-based outfit ASML, which is currently the only provider of Extreme Ultraviolet (EUV) machines used in the production of 5 nanometer (nm) and 3 nm silicon.

Without access to this, China's semiconductor industry is having to focus on chips made using more mature process nodes, such as those above 14 nm, which are still more than adequate for a broad range of applications, including the automotive sector, according to Buss.

Richard Gordon, practice vice president for semiconductors and electronics at Gartner, agreed on this point, saying that he also sees China using its semiconductor industry to service its own internal consumption more in the future.

In the meantime, China may well develop its capabilities in existing technologies, such as analog or mixed CMOS, but this will be part of a dual strategy, according to Richard Gordon, vice president for semic9nductirs and electronics at Gartner.

"I expect they will aim to compete in the legacy sector, while investing in developing new technology over the long term," he said. Without access to ASML and its advanced lithographic technology, this may take at least 10-15 years, but China will still try, he added.

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