Japan: Embargoes 23 semiconductor items from China
-The weakness of Chinese semiconductors is chip manufacturing-
– China didn’t think Japan would embargo –
We bring you a summary from President Online.
Japan’s China embargo: Targeting chip manufacturing’s Achilles heel
Japan embargoes 23 semiconductor items from China:
In July 2023, Japan implemented an “embargo on 23 semiconductor manufacturing equipment items from China.”
In semiconductor manufacturing equipment, “seven out of the top 15 companies are Japanese companies.”
China’s domestic production of semiconductors has fallen into a difficult situation.
US Department of Commerce:
In October 2022, the U.S. Department of Commerce passed comprehensive legislation.
It includes a ban on the acquisition of advanced artificial intelligence semiconductors.
Ban on export of semiconductor manufacturing equipment to China:
The United States lobbied Japan and the Netherlands not to export semiconductor manufacturing equipment to China.
Japan, the United States, the Netherlands, and the Semiconductor Tripartite Alliance:
The US-China semiconductor war has entered a new stage.
The United States, the Netherlands, and Japan form a network surrounding China’s semiconductor industry.
mpact of the embargo on 23 items from China:
Japan’s embargo measures are blocking China’s path to domestically producing semiconductors.
China’s wafer fab industry:
The industry was stunned by Japan’s embargo.
This time, we have once again realized that “Japan’s manufacturing facilities are extremely important.”
Risk assessment of Japanese products:
1. The industry has already responded to the risks of the US semiconductor embargo.
2. No countermeasures are being considered for Japanese manufacturing facilities.
China “never expected Japan to impose an embargo.”
China’s semiconductor support plan:
Japan’s exports to China exceed $10 billion annually.
Japan’s semiconductor industry is far superior to China in terms of production equipment and raw materials.
‘China’s weakest field’ is chip manufacturing (fabrication).
Japan’s latest export controls are the most stringent and comprehensive.
Areas where China is weakest:
Meanwhile, China announced that it would support the semiconductor industry worth more than 1 trillion yuan.
This is an important step toward domestic production of semiconductors in China.
Subsidies provided to Chinese companies:
1. Supports subsidies for companies to purchase semiconductor equipment.
2. This is the cost of constructing a semiconductor manufacturing plant or fab.
3. Companies receive a 20% subsidy for construction costs.
The only way to counter the US embargo on China is to domesticate the Chinese semiconductor industry.
These include Northern Hua Creative Technology Group (NAURA) and Kingsemi.
In fact, China’s semiconductor manufacturing stock prices soared.
US Entity List for China:
1. The ‘impact of the Entity List export control’ is not significant.
2. Japan’s measures will further shock the fundamentals of China’s development.
because,
3. US companies only export ‘chip designs and finished chip products’.
4. Japanese companies can provide ‘chip manufacturing equipment and raw materials themselves’.
Top semiconductor manufacturing equipment in the world:
Seven of the top 15 companies are Japanese.
The current embargo targets products for “front-end production of semiconductor manufacturing.”
This is a pre-processing device that is used in the circuit completion process on a blank silicon chip.
Post-process packaging equipment is not included.
List of 23 items of semiconductor manufacturing equipment:
1. 1 heat treatment equipment,
2. 3 cleaning facilities,
3. lithography equipment 4,
4. 3 etching devices,
5. 1 inspection/testing device,
6. 11 thin film deposition devices,
Nikon and Canon:
According to published materials, Nikon and Canon are the main manufacturers of lithography equipment.
Tokyo Electron:
The company mainly produces photoresist coating equipment, dry etching equipment, and vapor deposition equipment.
argeting China’s Achilles heel:
The weak point of China’s semiconductor industry is chip manufacturing.
China’s domestic production of front-end equipment is weak.
Japan’s latest export control regulations are aimed at the Achilles heel of China’s efforts to domestically produce semiconductors.
China’s advanced semiconductor level:
Currently, there are hundreds of fabs (semiconductor manufacturing factories) across China.
1. There are four to five advanced process companies in China.
2. Each has multiple cutting-edge semiconductor production lines.
Maintenance is most important:
Maintenance of manufacturing equipment after import is a major problem.
For China, Japan’s embargo is cruelly harsh.
3. Maintenance of manufacturing equipment requires a permit, of course.
4. Even if China procures used products, it cannot procure repair parts.
Share of domestically produced equipment in China:
China’s domestic production rate of semiconductor equipment will be only 22% in 2022.
1. Gained a certain market share for cleaning, heat treatment, CMP, and etching equipment.
2. The domestic production rate for lithography, surveying and inspection equipment, coating and developing equipment, and ion implantation equipment will be 10% in 2022.
Japan’s export control regulation list:
Thin film deposition equipment (PVD and CVD): Domestic production rate is 10%
Inspection/surveying equipment: Domestic production rate is 2%
Lithography, photoresist coating equipment: Domestic production rate is 0%
“Xinyuanwei”
Focusing on domestically produced photoresist coating equipment.
The front-end photoresist coating equipment supports process nodes of 28nm and above.
“Zhongwei (AMEC)”
Etching equipment now supports 5nm node.
“Northern Flowers”
The company handles etching equipment, thin film deposition equipment, heat treatment equipment, cleaning equipment, etc.
Difficult to domestically produce equipment in China:
Domestic production of manufacturing equipment and consumable materials in China is more difficult than making chips themselves.
We have built binding relationships with overseas suppliers for many years.
If we change to a domestic Chinese supplier, there will be a risk of defects.
Domestic supplier risks:
1. Technology must be constantly updated.
2. It requires a lot of money and trial and error.
https://news.yahoo.co.jp/articles/bab9898521f5eac2143ebdff5181bbcecfcb831a