In the escalating technological rivalry between the United States and China, the semiconductor industry has become a central battleground. While restrictions and trade barriers from the West have sought to limit China’s progress, recent developments suggest that the country is finding ways to adapt and even thrive under pressure. By the end of this year, China is expected to produce its first domestically developed 28nm lithography machine, marking a significant leap forward in its semiconductor ambitions.
A Global Battle for Technological Supremacy
The U.S. and its allies have been working diligently to curtail China’s access to cutting-edge semiconductor manufacturing equipment. Companies like the Dutch giant ASML, which holds a monopoly on advanced deep ultraviolet (DUV) and extreme ultraviolet (EUV) lithography machines, have been barred from selling their most sophisticated tools to Chinese firms. The goal is clear: to keep China from achieving self-sufficiency in producing advanced chips, particularly those below 5nm, which are critical for innovations in artificial intelligence, 5G, and other high-tech fields.
Starting January 2024, ASML will halt the delivery of even mid-tier DUV lithography machines to China, intensifying the pressure on the country to develop its own equipment. Facing these mounting challenges, Beijing has doubled down on its investments in semiconductor technologies, seeking to bridge the gap and assert its independence in this crucial industry.
A Decade of Strategic Investments
China’s journey toward semiconductor independence has been in the works for years. Significant funding was allocated in 2014 and 2019, with investments of $19 billion and $27.5 billion, respectively, to bolster domestic chip production. But 2023 marked a turning point. The Chinese government announced a massive $41 billion fund to accelerate progress in integrated circuits and lithography equipment, signaling its determination to catch up to global leaders.
This commitment has already yielded notable results. Semiconductor Manufacturing International Corporation (SMIC), China’s largest chipmaker, recently produced a 7nm chip for Huawei’s Mate 60 Pro smartphone. Remarkably, this feat was achieved using less advanced lithography equipment, showcasing China’s ability to innovate despite technological constraints.
SMEE Takes Center Stage
While SMIC’s advancements have garnered attention, the real breakthrough is coming from Shanghai Micro Electronics Equipment Group (SMEE), a state-backed company specializing in lithography tools. Currently, SMEE’s most advanced machines can only produce 90nm chips, far behind global leaders like TSMC, Samsung, and Intel, which are manufacturing chips at 3nm and beyond.
However, SMEE is about to change the narrative. The company has announced that by the end of 2023, it will deliver its first 28nm lithography machine, the SSA/800-10W. Although it cannot compete with ASML’s DUV and EUV technologies, this achievement represents a major leap for China’s semiconductor industry. The new machine will be a significant upgrade from SMEE’s existing SSA600/20 model, which has been limited to 90nm production.
Why 28nm Matters ?
While 28nm may seem outdated compared to the advanced nodes produced by global giants, it is still a commercially viable technology for many applications. Chips at this scale are widely used in automotive systems, home appliances, and industrial equipment—sectors where demand remains strong. By developing 28nm lithography capabilities, China can reduce its reliance on foreign suppliers for these essential components, bolstering its domestic supply chain.
More importantly, this progress lays the foundation for future advancements. SMEE’s success with 28nm equipment positions it to gradually tackle more complex technologies, potentially narrowing the gap with global leaders over time.
Challenges Ahead
Despite this milestone, China’s semiconductor ambitions still face significant hurdles. The technology required for EUV lithography, essential for chips at 5nm and below, remains extraordinarily complex and monopolized by ASML. Experts estimate that it could take China at least until the end of the decade to develop comparable EUV capabilities, even with substantial funding and government backing.
Meanwhile, ASML is not standing still. The Dutch company is preparing to deliver its next-generation high-numerical-aperture EUV machines, which promise to push chip manufacturing even further. These advancements could widen the technological gap, keeping China at a disadvantage in cutting-edge semiconductor production.
The Road Ahead
China’s announcement of a domestically produced 28nm lithography machine underscores its resilience in the face of external pressures. While it is unlikely to rival global leaders in the near term, this achievement highlights the country’s determination to carve out its place in the semiconductor industry.
As the U.S.-China tech rivalry continues to unfold, the stakes are only getting higher. With billions of dollars at play and advancements happening on both sides, the semiconductor industry is poised to remain the frontline of this global power struggle. For China, the journey toward full independence in chipmaking may be long, but the progress made so far proves it’s a race the country is determined to win.
My name is Noah and I’m a dedicated member of the “Jason Deegan” team. With my passion for technology, I strive to bring you the latest and most exciting news in the world of high-tech.