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Recent reports suggest that SMIC, China’s leading semiconductor company, is testing its first in-house Deep Ultra-Violet (DUV) lithography machine. This development could mark a significant milestone in China’s push to reduce reliance on foreign technology.
China’s Chipmaking Ambitions Drive Domestic Equipment Production
The surge in demand for semiconductors in China is largely driven by the growth of domestic artificial intelligence (AI) firms, which are developing advanced computing products. The government is encouraging major Chinese companies to shift towards homegrown solutions, thereby boosting the local chip supply chain. According to a report by the Financial Times, SMIC is currently testing DUV equipment from Shanghai-based startup Yuliangsheng. If these tests prove successful, they could pave the way for China to produce more advanced machinery.
SMIC’s Dependence on Foreign Equipment
Currently, SMIC heavily relies on Dutch firm ASML for its manufacturing tools. However, under current U.S. export restrictions, SMIC is limited to less advanced DUV technologies like early-immersion DUV. This has allowed the company to scale up to 7nm production but prevents further advancements by relying solely on Western alternatives. Consequently, SMIC has turned to domestic options, with Yuliangsheng’s DUV equipment being tested for 7nm production.
Domestic DUV Equipment Capabilities
The domestic DUV machines reportedly have the potential to support 5nm production as well, albeit with lower yield rates. Achieving such node sizes through deep-ultraviolet techniques involves multiple patterning, which can lead to alignment errors and low yield rates. Nevertheless, given that China’s primary focus is on scaling up production, SMIC may be willing to accept these lower yields.
China’s Push for Increased Chip Production
The drive to increase domestic chip production stems from the growing demand in the AI industry. As reported earlier, manufacturers are planning to triple their AI chip output to meet market demands. This effort aligns with China’s broader strategy to enhance its technological independence and reduce reliance on foreign semiconductor technologies.
In summary, SMIC’s testing of in-house DUV equipment could be a significant step towards achieving more advanced manufacturing capabilities, driven by the domestic demand for semiconductors, especially those required for AI applications.
