Sunday, July 25, 2021

Industry News
CST News
Tester FAQs
Industry News

U.S. ban on SMIC to create tight supply for foundry capacity

Friday, September 11, 2020

Taiwan-based fabless chipmakers, with many of them contracting SMIC to manufacture their chips supplied to the Chinese market, are mulling shifting orders away from the China-based foundry because of potential US sanctions against the firm, according to industry sources.

SMIC's 8-inch wafer fabs fulfill mainly orders for memory device controllers, display driver ICs, power management chips, USB device ICs and microcontrollers, said sources from PC-related chipmakers. As high as 70% of the orders are placed by SMIC's China-based clients and more than 90% of those for China's domestic demand.

China remains SMIC's largest market accounting for more than 60% of its total wafer sales.

TSMC, UMC and VIS have already seen their 8-inch fabrication lines run at full capacity utilization, and it remains to be seen whether these Taiwan-based foundries will be able to handle the additional orders transferred from China. Nevertheless, 8-inch foundries will undoubtedly prioritize high-margin orders, which may leave little room for low-margin orders, particularly those for LCD driver ICs and MOSFET chips, the sources said.

SMIC is also a contract manufacturer of Huawei, who reportedly has placed 14nm FinFET chip orders with the foundry house. Huawei, along with its subsidiary, HiSilicon, faces tougher US restrictions.

Being a key player in China's IC self-sufficiency push, SMIC has stepped up the development of its FinFET process technology and is keenly expanding investment in advancing manufacturing nodes, the sources said.

The Trump administration is reportedly considering adding SMIC to a trade blacklist, which would bar the largest China-based contract chipmaker from any transactions with US companies.

SMIC has issued a statement claiming "any assumptions of the company's ties with the Chinese military are untrue statements and false accusations."

By: DocMemory
Copyright © 2019 CST, Inc. All Rights Reserved

CST Inc. Memory Tester DDR Tester
Copyright © 1994 - 2019 CST, Inc. All Rights Reserved