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SMIC obtains a license for mature process equipment in the United States, and the market tension eases

On December 30, it was rumored in the industry that the United States agreed to open SMIC’s mature process equipment license.

On December 31, issued a document saying that after verification, the news was confirmed to be true. After the news came out, SMIC’s share price rose for two consecutive days, with an increase of more than 20% in the two days.

For SMIC, this may not be good news. After all, advanced processes such as 10nm are still being strangled, but for the entire semiconductor industry, the licensing of SMIC’s mature processes may be a major benefit.

market chaos

On December 18, the United States announced that it would add SMIC and other companies to its Entity List. For products or technologies that are applicable to the U.S. Export Control Regulations, suppliers must first obtain an export license from the U.S. Department of Commerce before supplying to SMIC. ; For products or technologies used in 10nm and below technology nodes (including EUV extreme ultraviolet lithography technology), the US Department of Commerce will adopt a “Presumption of Denial” policy for review.

According to the data, SMIC, as the world’s fifth largest wafer foundry, has a monthly production capacity of about 480,000 8-inch wafers, with a market share of about 4.5%, and its revenue is mostly concentrated in mature processes such as 65/40/28nm. , accounting for more than 50%.

These mature processes of SMIC cover NOR Flash, power management IC, driver IC and other fields. The 8-inch foundry production capacity is already very tight. As soon as the US ban was issued, SMIC’s major customers Qualcomm and GigaDevice were blocked in their shipments, which led to a surge in the quotations of chips such as NOR Flash, power management ICs, and driver ICs. The global foundry order is in chaos.

Market tension eases

Since the second half of the year, the foundry capacity has been in short supply. After SMIC was sanctioned by the United States, the market panic has further intensified. However, as the United States lifts the ban on equipment, the 8-inch foundry market and components such as NOR Flash will be temporarily loosened. tone.

For SMIC, there is currently a shortage of mature process production capacity on the market, and prices are rising. And this situation may continue until the second half of next year, and it is a more realistic choice for SMIC to turn to a mature process.

In fact, in the second quarter performance statement in August this year, SMIC once stated that the main reason for the record high revenue and profit growth was the boom in demand for mature processes. exuberant”.

Under the strong demand, SMIC is also actively expanding the scale of mature process production capacity. On August 1, SMIC announced that it will establish a joint venture with the Beijing Economic and Technological Development Zone Management Committee to engage in development and operation focusing on the production of 28nm and above integrated circuit projects. The first phase plans to invest 7.6 billion US dollars. Further increase the production capacity of mature processes.

Advanced manufacturing process is still out of play

According to previous news, the US licenses for mature processes are issued in batches, and the equipment used for the production capacity of 40,000 to 50,000 pieces is issued at one time. However, in terms of advanced process technology, the United States will not let go easily.

The United States prohibits the export of equipment and materials (such as EUV) used in processes of 10nm and below to SMIC-related entities, which has a significant impact on SMIC’s advanced processes, and the development of advanced processes can be said to be completely shut down.
SMIC also responded that it will not be significantly adversely affected in the short term, but the research and development and production capacity construction of advanced processes of 10nm and below will have a major adverse impact.

However, from the perspective of SMIC’s rapid acquisition of mature process licenses, the United States should have no intention to prevent the development of SMIC’s mature processes. In the future, wafer foundries such as TSMC also hope to obtain licenses for Chinese IC design companies, but All will be labeled as “mature process”.

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