SMIC faces a blurry future after US sanctions

SMIC faces a blurry future after US sanctions

had become The future of the major chip manufacturer is in China SMIC is hazy after the company said it was having trouble developing advanced chip manufacturing operations after being placed on the US commercial blacklist.

China sees the company as its best hope to catch up with competitors in the vital field of semiconductor manufacturing.

“Based on our initial assessment, adding to the blacklist will have significant negative impacts on the research and development of advanced processes under 10 nm,” SMIC said in a statement, adding that the short-term impact on the company’s operations and financing will be limited.

Curbing SMIC’s ability to make advanced chipsets could have a profound effect on China’s efforts to catch up with semiconductors, which are a key part of Beijing’s broad strategy to counter US technological dominance.

It is reported that SMIC is able to mass-produce the chips according to the 14nm manufacturing process only, which makes it far behind competitors, such as TSMC, which aims to produce the chips according to the 3nm manufacturing technology by 2022.

SMIC’s short-term approach is currently focused on smaller, third-generation semiconductor chips, and can return to developing advanced manufacturing processes after easing the impasse between the United States and China.

However, (Sheng Linghai), senior semiconductor analyst at market research firm Gartner, thinks the sanctions will have a broader scope.

“It is difficult to find alternatives to US suppliers in the short term, and the size of the impact depends on the estimate of the US government,” Lingai said.

Manufacturing operations with 55 and 65 nm technology contributed 25.8 percent of the total chip revenue in the July-September quarter, compared to a contribution of 14.6 percent from the more advanced manufacturing processes according to 14 and 28 nm technology.

Tighter U.S. restrictions may complicate SMIC’s efforts to continue technological advances in semiconductors, as China lags behind the world.

The commercial blacklist means that US SMIC suppliers must now apply for a license from the US Department of Commerce before supplying products and technologies to the Chinese company, which relies on US equipment.

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