China's semiconductor manufacturing - look at it another way.

Overall, China and the United States are more active in semiconductor manufacturing companies, while Europe and Korea tend to stabilize social investment. barcode scanning solutions China and the United States are active in the field of semiconductor manufacturing industry because on the one hand, China is the largest chip market in the global economy, and for the needs of industrial chain security, the future may gradually form the world's largest theoretical system of internal circulation in the semiconductor industry; Another important aspect is that the US government, in order to ensure that it is still not at the top of the industrial chain in the semiconductor field, uses its technological innovation advantages and international brand influence, takes four-party cooperation as the main starting point, strengthens its control over the global industrial chain and local investment, and also restricts the development of China to provide space and speed.

But on a practical level, the two sides are different. precision automation systems Due to the serious outflow of the US manufacturing industry, some related supporting facilities of the domestic manufacturing industry are actually relatively backward. Although the United States has encouraged the repatriation of manufacturing in recent years, it has also made some achievements in terms of data, but the semiconductor manufacturing industry, especially the wafer manufacturing industry, needs a large number of related supporting facilities and enterprises, it is impossible to let all the basic supporting facilities and related enterprises land or return overnight, in addition, Some domestic infrastructure projects have also been stymied by local government constraints and union protests. Foreign companies want to build factories in the United States, but cost, policy, and other reasons prevent them from getting the equipment, materials, and labor they need to build factories in the United States, and foreign companies will be treated unfairly by local suppliers (who only prioritize American companies).

In contrast, China is likely to become self-sufficient in larger conventional chips, which is determined by the current market demand of the semiconductor industry and the current development of semiconductor manufacturing technology in China.

With the widespread application of 5g technology and the increasing use of sensors in the Internet of Things era, semiconductor manufacturing solutions this semiconductor industry will usher in an important turning point around 2025. At this major inflection point, the more advanced 5 nm and 10 nm chips required by emerging technologies will not be the most pressing issue, however, traditional chips of 28 nm and above (especially 90/130 nm and above) are lacking products.

Sumco, a global supplier of large-scale process chips, has publicly stated that its 300 mm wafers have been sold out by 2026. While these large-scale [300mm wafer] chips cannot be used in high-end applications, such as processors in the latest smartphones or AI chips in self-driving cars, they are still very important for most electronics in the long tail and related downstream industries.

At present, developing China as the mainland wafer fab capacity is transitioning from 8 inches to 12 inches. Local logistics equipment manufacturers have realized multiple links and equipment can be supplied in batches on the 28nm production line, and some management companies such as NAURA have entered the 14nm production line for verification and small batch supply of equipment such as silicon etching machines and cleaning machines. The current process progress of SMIC International Society, the largest wafer foundry service enterprise in China's traditional local culture, is 14nm, mainly its holding company SMIC South region for safe production, and the 7nm process is under continuous research and development (according to foreign media speculation SMIC has quietly released and started mass production of its 7nm process node, called N+2). Smic Environment may not have discussed this publicly in the earnings report because they were afraid they would be affected by the US counterattack).

The most advanced U.S. or European foundry chips are based on GlobalFoundries' 12-nanometer chips. In contrast, the opportunity for SMIC in this area (7nm to 14nm) will be huge.

However, domestic semiconductor manufacturers also need to pay attention to some new changes in the semiconductor market since the first half of 2022: the structural differentiation of the semiconductor industry chain. On the one hand, the price of chips in downstream general categories and consumer electronics is obvious. On the other hand, downstream automotive chips are in short supply, and major manufacturers are under pressure to deliver. In the face of such new changes, end customers will inevitably set off a wave of orders. If the downturn in the downstream consumer electronics market continues for a long time, it is bound to affect the demand of other traditional industries downstream of semiconductors. Once this momentum continues to the last round of planning cycle, all the expansion projects set by the generation plants are landed, it will be a disaster for domestic semiconductor manufacturers.