China’s SMIC Chips Exposed to Be High Cost Low Yield Rate; Won’t Challenge International Standards, Experts Say
Semiconductor chips manufactured by China’s largest chipmaker, SMIC, have been found to be more expensive and less efficient than those produced by Taiwan’s TSMC, according to experts. The chips from SMIC are reported to be 40 to 50 percent pricier than their counterparts from TSMC, while their yield rate is less than one-third. This revelation poses a significant challenge to the Chinese Communist Party’s (CCP) ambition to compete in the global chip market.
Amid international sanctions on advanced chips and chip-making equipment, SMIC is attempting to produce 5-nanometer Kirin chips for high-end Huawei smartphones using existing imported equipment. However, the report indicates that SMIC’s chips are considerably more expensive than TSMC’s similar-level chips, and their yield rate is significantly lower.
Experts attribute this discrepancy to the fact that SMIC’s technology is not as advanced. The company produces a lower proportion of good chips and a higher proportion of defective ones, resulting in increased costs. This finding undermines the CCP’s claim of a major breakthrough in China’s chip technology.
Moreover, the United States and the Netherlands have tightened export restrictions on chip machinery and equipment, making it increasingly challenging for China to achieve market efficiency. Sun Guo-xiang, an associate professor at Taiwan’s University of Nanhua, suggests that China’s outdated technology and inability to keep up with advancements in optical technology and smaller nanometers will further hinder its progress in the chip industry.
The CCP’s continuous technological containment by Western democracies stems from allegations of technology theft and the party’s use of high-tech for human rights violations. To establish a self-sufficient semiconductor supply chain, China has invested significant resources in building a nationwide system.
The Biden administration has recently tightened export restrictions on advanced chip manufacturing equipment to safeguard national security. This move, along with long-standing cooperation between the United States, the Netherlands, and Japan, aims to prevent the CCP from acquiring the latest chip production tools.
While China may be capable of producing lower-end chips, it lacks the market scale and efficiency to compete on a larger scale. TSMC, the world’s largest semiconductor maker, recently announced plans to build factories in Japan and the United States, highlighting the importance of cooperation between democracies in the field of semiconductors. Maintaining international standards in semiconductors and artificial intelligence is crucial, as China seeks to impose its own standards as global norms.
The technological war between China and the United States revolves around semiconductors and AI, with the West, led by the US, striving to maintain the current standard. It is evident that China’s chip technology lags behind, and its efforts to catch up and challenge international standards face significant obstacles. With democratic nations maintaining sustained advantages, China’s ambitions in the chip industry remain uncertain.
In conclusion, SMIC’s chips have been revealed to be costly and inefficient compared to their Taiwanese counterparts. The technological gap highlights the challenges faced by China in asserting its dominance in semiconductor technology. As Western nations tighten export restrictions and continue to collaborate in the semiconductor industry, China’s ability to catch up and compete effectively remains uncertain.
