Superior chip in Huawei Mate 60 Professional smartphone produced on ASML DUV machines: sources
Regardless of these broad restrictions, Huawei stunned the world in August when it quietly launched its new 5G smartphone with a cutting-edge processor. A teardown of the gadget performed by TechInsights for Bloomberg Information revealed the chip was produced by SMIC, demonstrating manufacturing capabilities nicely past the place the US had sought to cease China’s advance.
That prompted questions each about how SMIC was capable of manufacture the chip, and the effectiveness of the Washington-led controls. SMIC didn’t reply to a request for remark.
ASML occupies a pivotal position within the world chip provide chain. It has a monopoly on superior excessive ultraviolet lithography programs, or EUVs, which might be indispensable to the manufacturing of essentially the most cutting-edge chips, and it additionally provides the DUV machines wanted to make extra mature semiconductors.
ASML has by no means been capable of promote its EUV machines to China due to export restrictions. However less-advanced DUV fashions may be retooled with deposition and etching gear to provide 7-nm and presumably much more superior chips, in keeping with trade analysts. The method is way more costly than utilizing EUV, making it very troublesome to scale manufacturing in a aggressive market setting.
In China, nevertheless, the federal government is prepared to shoulder a good portion of chip-making prices. Chinese language corporations have been legally stockpiling DUV gear for years – particularly after the US launched its preliminary export controls final 12 months earlier than getting Japan and the Netherlands on board.
In line with an investor presentation revealed by the corporate final week, ASML skilled a bounce in enterprise from China this 12 months as chip makers there boosted orders forward of the export controls taking full impact in 2024. China accounted for 46 per cent of ASML’s gross sales within the third quarter, in contrast with 24 per cent within the earlier quarter and eight per cent within the three months ending in March.
New controls that the Biden administration introduced this month additional restrict the exports of DUV machines.
The laws use a unilateral authority known as a de minimis rule to manage the sale of specified foreign-made lithography machines that include any quantity of American supplies, mentioned Stephen Bartenstein and Peter Lichtenbaum, export management specialists at legislation agency Covington & Burling, with out commenting on the businesses affected.
ASML chief government Peter Wennink informed buyers final week that collectively, the brand new US and Dutch curbs will have an effect on as much as 15 per cent of the agency’s gross sales in China.
That rule impacts ASML shipments to 6 fabs in China, in keeping with individuals acquainted the matter – together with one SMIC facility. It’s unclear whether or not that’s the facility that produced the 7-nm chip for Huawei, and the US Bureau of Business and Safety didn’t reply to questions on the matter.
Broadly talking, the brand new US curbs deliver the nation’s tools restrictions in keeping with these of the Netherlands, in keeping with a number of trade consultants. However the regulation of immersion DUV machines is one space the place the US went additional than its ally, in a transfer that dangers being seen as extraterritorial bullying.
A senior Dutch official confirmed that the Netherlands’ authorities was knowledgeable by the US in regards to the October 17 measures. However that doesn’t imply the transfer went over nicely: A bunch of Dutch politicians, together with lawmakers from two events within the ruling coalition, known as for his or her authorities to take a stand in opposition to the brand new US measures.
“Unilaterally altering the foundations throughout a contest the place competitiveness and strategic autonomy are at stake is troublesome to just accept, even by a superb ally,” mentioned Dutch Christian Democrat lawmaker Mustafa Amhaouch earlier this week.
ASML’s Wennink additionally publicly opposed the measures and warned they could encourage China to develop competing know-how. “The extra you place them beneath strain, the extra probably it’s that they may double up their efforts,” he mentioned in a January interview with Bloomberg Information.
“The US has made a unique safety evaluation. They’re free to take action,” Dutch Overseas Commerce Minister Leisje Schreinemacher mentioned within the parliament this week. However she additionally mentioned she believes the European Union ought to have a better position in discussions with the US on export controls for delicate know-how and that she is going to deliver this challenge up with Prime Minister Mark Rutte in Brussels.