China to gain foundry chip production share despite sanctions
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Chinese foundries will increase their share of 300mm wafer production capacity from 24 percent in 2022 to 26 percent in 2026 despite export controls on semiconductor manufacturing equipment, according to TrendForce.
The market researcher reckons China and South Korea will increase their share of production at the expense of Taiwan, the US, Japan and Europe.
If exports to China of 40/28nm DUV equipment receive approval, there’s a chance that this market share could expand even further, possibly reaching 28% percent by 2026, according to TrendForce.
Global foundry wafer capacity by region for 2022 and 2026 in export-restricted and best-case conditions. Source TrendForce.
China is facing controls on both extreme ultraviolet (EUV) and deep ultraviolet (DUV) lithography and associated equipment that impact production of everything from 40nm and 28nm nodes on down. The key countries involved in the export controls are the US, Japan and the Netherlands (see ASML sees export controls on latest DUV lithography equipment).
As well as preventing the expansion of production it will impact servicing and replacement parts for existing production lines. Photolithography, deposition, and epitaxy will be subject to these recent export restrictions. Beginning September 1st, the export of all controlled items will require formal authorization. But such is China’s ramping of production of more mature nodes and power semiconductors that it will still increase its share.
Chinese foundries have been primarily developing mature processes such 55nm, 40nm, and 28nm. Furthermore, demand for deposition equipment can be largely met by local Chinese vendors. The main limiting factor remains photolithography equipment, TrendForce said. China is also working hard to develop internal suppliers of chip manufacturing equipment that could potentially take production below 28nm.
The export controls have hit SMIC’s Beijing and Shanghai fabs as well as Nexchip’s A3/A4 fabs in Hefei. SMIC’s Beijing and Shanghai fabs may be forced to delay their expansion plans, pending permission for their equipment vendors to proceed with shipments.
Related links and articles:
News articles:
China squeezes the West’s access to gallium, germanium
ASML sees export controls on latest DUV lithography equipment
US seeks to expand ban on ASML’s China sales
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