How China is boosting AI chip output despite US sanctions
What's the story
China's semiconductor industry is beating US export controls by upgrading older chipmaking machines instead of importing restricted new ones. Chinese fabrication plants are retrofitting advanced deep ultraviolet lithography systems from ASML to manufacture chips for artificial intelligence (AI) and high-end smartphones, Financial Times reported. This strategy highlights loopholes in a regulatory regime meant to slow China's technological progress.
Strategy
Chinese chipmakers boost performance with existing equipment
US and Dutch export controls prevent ASML from selling its most advanced lithography systems to China. So, instead of using banned tools, Chinese fabs are upgrading their existing machines with advanced components from overseas. This strategy lets them get more performance out of equipment that is still legal to own and operate.
Adaptation
Chinese fabs adapt older ASML systems for advanced chip production
Chinese manufacturers have adapted older ASML systems like the Twinscan NXT:1980i to produce seven-nanometer chips. These are modern chips required for modern AI workloads. The adaptations include improved wafer stages, optical components, and alignment sensors sourced from secondary markets. These upgrades allow greater precision when layering circuits, improving yields and throughput without formally breaching export rules.
Usage
China's SMIC and Huawei use older ASML tools
China's largest chipmaker Semiconductor Manufacturing International Corporation and tech giant Huawei are known to be producing advanced chips using older ASML tools. The process often relies on multi-patterning, a technique that involves repeated passes of DUV lithography to achieve finer features normally produced with EUV machines. While this method is slower and more expensive, component upgrades help offset some of these drawbacks by improving accuracy and efficiency.
Challenges
US-led efforts to constrain China's semiconductor ambitions
The developments highlight the challenges facing US-led efforts to constrain China's semiconductor ambitions. Washington has pushed allies such as the Netherlands, Japan, and South Korea to tighten controls across the supply chain. This includes not just equipment sales but also servicing and technical support. ASML can maintain existing machines in China but can't improve their overlay accuracy or boost throughput beyond marginal levels.