The US seems to be failing in its bid to cripple China’s high-tech capability

A recent report indicates China’s biggest chipmaker is making rapid progress despite having been on the US entity list since 2020.

Semiconductor intelligence platform Tech Insights got hold of a chip that it says was manufactured by SMIC using a 7nm process. On one level it’s not too surprising that SMIC is capable of such a thing, since it has been moving in that direction for some time. What is harder to explain is where it got the cutting-edge kit you need to manufacture at such an advanced node, since much of it is made by US companies such as Applied Materials.

The US added SMIC to its entity list towards the end of 2020, apparently out of a desire to inhibit its technological progress. At the time the US announcement technologies needed for semiconductor manufacturing processes of 10nm and below “will be subject to a presumption of denial to prevent such key enabling technology from supporting China’s military modernization efforts.”

The appearance of SMIC 7nm chips in the wild would appear to confirm that the US embargo has failed, at least in this respect. It seems unlikely that SMIC is relying entirely on kit purchased before it was put on the entity list and even more so that it could have got hold of the requisite kit from within China. The US entity list has been known to be of limited effectiveness for some time, thanks in part to exemptions granted by the US itself, and this is further evidence of that.

We are in the middle of a chip arms race as both the US and China throw money at the sector in a bid to make themselves self-sufficient when it comes to these all-important components. The US seems determined to use trade policy to try to inhibit Chinese technological development but the genie is apparently out of the bottle.

Having said that, Samsung and TSMC are a node or two ahead of SMIC, which amounts to a lead of around four years. And the US does appear to have been successful in preventing Chinese access to EUV lithography technology, which is vital for more advanced manufacturing processes. But on the whole, this bid to turn off the technological tap seems ultimately doomed to failure.

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