It became known that TSMC will stop shipping chips made using 7nm and more advanced processors to Chinese customers who work in the field of AI systems and graphics processors development starting on November 11.
This step, taken under pressure from the American authorities, may significantly affect China’s position in the global technology race, forcing it to turn to alternative sources of supply for chips manufactured according to advanced technological standards.
In other words, Chinese companies will start moving to other suppliers of semiconductor products, such as SMIC, which is the world’s third largest manufacturer of microchips. However, there are a couple of unpleasant nuances here.:
- SMIC uses DUV lithography technology rather than the more advanced EUV technology, which makes its processes less efficient for serial production of 5nm chips.
- The cost of manufacturing chips at SMIC is almost 50% higher than at TSMC facilities, and the percentage of usable products is less than one-third of the same TSMC figure.
By the way, according to the results of the second quarter of 2024, Taiwan’s TSMC continues to be the world leader among contract semiconductor manufacturers, occupying 65.3% of the entire market. Samsung is in second place with 11.5%, while SMIC still holds the third position with 5.7%.