5 Steps required for China's semiconductor self-sufficiency: Latest progress and updates July 2021

5 Steps required for China's semiconductor self-sufficiency: Latest progress and updates July 2021

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good morning ladies and gentlemen welcome  to my new video this video is going to be   about the chinese semiconductor industry all  this latest developments all the latest news   this is the update from my previous semiconductor  video and what i'm going to be talking about   today is the five steps that china is taking  to be self-sufficient so before i start if   you can kindly subscribe like share comment  whatever you can to help promote the channel   if you like my content you're welcome  to join my patreon or buy me a coffee so   without further ado guys let me start with  the show so as an introduction guys i like   to introduce this guy this guy is called the chips  are to lead the semiconductor self-sufficiency   so he was appointed this year by um xi jinping  and his goal is to achieve technological   self-sufficiency of around 70 by 2025 currently  china is around 18 to 20 percent but they want to   hit 70 percent self-sufficiency by 2025. so how  are they going to do it i'll explain in a bit   so his name is luhi i hope i'm pronouncing  it right and he was appointed this year   and basically china has announced a 1.4  trillion state program to support r d a key in   enabling technologies over the next five  years these include semiconductors artificial   intelligence robotics 5g and 6g data centers  and cloud and quantum computing as well and   low earth orbiting satellites you can see  semiconductors is going to be one of the highest   r d processes in china all of china is currently  focusing on that as a number one priority   same way they focused on nuclear weapons during  the mao period as well as a space program as well   as jet engines as well as having their own navy  aircraft carriers submarines stealth aircraft   you name it throughout china's history they've  come up with challenges and challenges they   have easily overcome for example there was a huge  arms embargo on china and they could not buy any   advanced weapons from any of the countries  in the west so they had to have their own   weapons arms program so now they've  managed to achieve um greatness with it   they've got their own stealth aircraft stealth  technologies anti-aircraft missiles hypersonic   submarines navy aircraft carriers and they did  this themselves really without any help from the   west same with the space program you know china  was banned from the international space program   because they thought china couldn't add anything  new to it but since then china has pretty much   come on a par with the american space program  they've sent rovers to mars etc so pretty much   on the par with with americans at the moment so  you can see um the history where china has faced   great challenges they managed to overcome  it but i believe this is probably going to   be their greatest challenge so do you think they  can achieve it or not so let's find out shall we   so i'm going to be talking about five major steps  that china requires to be self-sufficient none of   them are in importance all of them are important  in their own way so i'm going to be starting with   having a great talent pool because china has never  had its own semiconductor industry the talent pool   for its semiconductor is very very small china  was happily buying semiconductors from america   before the trade war happens there was a good  understanding that china would continue buying   semiconductors from america um that would keep  their trade imbalance going and they did not   want to upset americans by having their own  semiconductor industry so that's probably one   of the main reasons they didn't want to push  for having their own semiconductor industries   there were companies out there like smic but they  were they didn't have any government benefits or   subsidiaries or help from the government they  were pretty much on a private basis and they   were very much far behind companies like tsmc  and stuff like that so there wasn't really much   of a semiconductor industry there wasn't a supply  chain there wasn't a big talent pool in china at   the time all of it had changed after the trade war  started and that's when china realized bloody hell   we need to have our own self-sufficiency when  it comes to semiconductors because if america   turns off the switch you know our economy could  be ruined so so this is a very much an important   step that china requires to be self-sufficient  because some semiconductors is the future every   iod item and electric cars and every electric  unit needs a semiconductor and without that   they cannot function and they cannot be the  biggest manufacturer in the world so they   they will be hugely hit if their manufacturing  is hit in some way and you can see it with um   cars right now with the chip shortage how  much is affecting not only china but all the   electric cars and car manufacturers around the  world a slightest hit in the shortage of ships   does affect the economy the gdp um quite  quite hard so it's very very important that   china develop its own semiconductor industry  because chips are the new oil and without chips   a country cannot move forward so one  thing china has realized they do not   really have much of a talent pool when it comes  to semiconductor technologies and semiconductor   talents and they also want to bring up a whole  new generation of semiconductor talent above   what they have right now so a lot of the  top universities are now doing courses in   semiconductors and a lot of youngsters can now  learn and do degrees about semiconductors so   in about four or five years time the talent  pool will be much much higher than it is now   and it starts from the universities upwards  really because you can see in america all of their   universities they do they have very very good  research when it comes to semiconductors and other   top electronic and engineering items so so this  is the part where usa actually leads and china but   china needs to very much catch up when it comes to  r d with semiconductors so they are putting a lot   of money into teaching in universities research  r d so this is going to be the first main step so the second major step that you need to be  self-sufficient you need a global supply chain   based on design and manufacturing and supply  chain so the currently us leads the most r d   intensive activities uh electronic design core  intellectual properties chip design and owing to   world-class universities vast pool of engineering  talent and market-driven innovation ecosystem   sml of holland leads advanced manufacturing  equipment and tsmc and samsung is at the   forefront for weber fabrication which requires  massive capital investments supported by   government incentives as well as access to  robust infrastructure and a skilled workforce   china on the other hand is a leader  of assembly packaging and testing   which is relative relatively less skillful and  capital intensive and is investing aggressively   to expand throughout the value chain so  basically you can see from this diagram here   that us has pretty much taken over most of the  supply chain of semiconductors around the world   and you can see um all of these components um  it starts with the design aspect you got the   core you got the ips and then you've got  the equipment and then finally you've got   the materials and us obviously excels in  the first few stages of the supply chains   and you can see us in dark blue and china is  in red so china is hardly around in the first   you know four stages when it comes to equipment  you can see us owns most of the equipment   you can see very little equipment is owned by  china and china is excelling in the last few   stages and but the last few stages are not very  important to be honest this is where you do all   your packaging you do all your testing etc  and it's not really that important the most   important stages are the first um few stages so  the equipment part is a bit of a problem for china   because they're banned from buying all the latest  electr euv machines extreme lithography machines   they are allowed to buy the old generation  duv machines and but they allow you to make   semiconductors 14 nanometers and above making  them seven nanometers and below you need the   euv machines which um with china has banned from  buying and this happened from from the trade war   so that is a big problem in terms of materials  china is building its own supply chains of   materials so that shouldn't be an issue as you can  see china is excelling in that in that department   but they are lacking in the design aspects  or the first few stages and this is something   china is building on at the moment they are  trying to build a full supply chain from start   to end where they control everything and they're  not relying on on america or other countries   asml is the biggest equipment manufacturer and  tsmc and you've got samsung which are the biggest   fabs out there and yeah they are facing a huge  hurdle guys i mean you can see from this gap   from this graph how much of a hurdle that  china is facing but you've got to understand   that this is all a start for china they're  just beginning this supply chain now from   beginning um to end they've not been doing  this for years and years this is something   the whole country is focusing on right now and one  of the main things they need to get right is the   full supply chain so they have started working  on this supply chain and and we'll see how they   get along of the next few years it's  not going to be a quick and easy job   it's going to take them a few years to mature so  we'll see how they get along in the next few years   so number three in the list is equipment  and as you know as i've explained earlier on   um china is not allowed to buy any equipment from  asml or any other countries like japan south korea   anything with euv related that they cannot build  however they can buy duv machines which are one   generation below which means you can produce 28  nanometers sometimes even 14 nanometers as well   but what china is doing right now they are  trying to build their own lithography machines   and the first lithography machine is actually due  for delivery at the end of 2021 and the company   itself is called smee shanghai micro electronic  equipment so they've done all of their testing um   and they're going to be releasing this  machine by the end of 2021 and this will   be able to produce 28 nanometers chips and 28  nanometers chips is actually not bad because um   you can see here why 28 nanometers chips  are important because they are pretty   much used by a lot of iot devices which  is internet of things um things like 5g   and you know phones tvs a lot of them use the  iot devices but the latest phones the things   like apple samsung that require five nanometers  and below and they are what you need an euv   machine for but seventy eighty percent of the  time regarding the iot devices you you just   need 28 nanometers and also you can see some of  the examples here uh devices ranging from smart   traffic lights fridges autonomous vehicles robots  next generation internet um drones and then you   have human robotics brain processing bpu core  units are made with 28 nanometers technology   automobiles data drone centers wings robot data  centers with arms and legs you can see most of the   stuff literally 80 of electronical items need 28  nanometers or perhaps even 14 nanometers which i'm   gonna get to next as well so even though they have  their own 28 nanometers lithography machine coming   out china is also in the protest prototype stage  for euv lithography machines as you can see from   this article here there there are a lot a step  closer to microchip independence they've managed   to do a lot of testing with the euv and they have  a euv prototype ready which which is able to do   seven nanometers chip production as well so this  is still in the testing stage and there's no news about when this is going to be released but  i would probably estimate over the next few years   or even you know three four years because the  euv is a big jump up in technology from duv   and it's not going to be very easy to to make they  still have a lot of testing to do regarding it   but there is prototypes in place  and plus also china is also   discovering new laser lithography technology that  is just they've invented themselves um with their   own ip so that also could be a way as well so  there are lots of steps that china is taking at   the moment and hopefully they will come into  fruition over the next few years it's not a   easy thing to do but with 1.4 billion  population and the whole whole of china   focusing on this i'm sure they will have some good  results coming up in the next few years so number   four in the list is mass production so before they  get to seventy percent self-sufficiency uh they're   currently around eighteen to twenty percent at  the moment they need to increase the output of   the chips they're making and they're heading in  the right direction and you can see from this   article here china's semiconductor output hits  record highs beijing boosts local production   amid intensifying u.s china trade war so china's  integrated circuits surpassed 30 billion units   in june 44 increase over the previous year so  this is increasing a year by year as you can   see but they've also got a lot of projects  ongoing for example their biggest fab smic   is building a new 28 nanometer sub in shenzhen  and that's with the help of the government as   well so they're spending a lot of money on  that so that's going to increase production   um they're also building brand  new sub 40 nanometer fabs as well   there's a couple i think there's a fab  in beijing that they're building as well there's 14 nanometer chips to be expected to  be mass produced next next year as well so at   the moment 28 nanometers is something china  can produce quite easily but 14 nanometers   is something that's going to be mass producing  next year and that's going to help them   get to their self-sufficiency um obviously  they can't build um sub five nanometers yet   but having 28 nanometers and 14 nanometers would  basically be enough to give you that 70 percent   self-sufficiency that china is looking  for because eighteen ninety percent of   the products uh electronic products require uh  28 nanometers or 14 nanometers so pretty much   china can do everything it wants with these  chips only thing lacking is the phones the   latest smartphones so the companies like huawei  would be affected but most other companies 99 of   companies are not going to be affected because  they can easily use these chips and if china   can mass produce 28 nanometers and 14 nanometers  especially with all these new factories and and   all of hundreds and thousands of chip companies  that are opening every year all around china   i'm pretty sure they can hit that 70 figure  uh by 2025 and i'm pretty confident of that   so the fifth and final um thing that china is  is focusing on is future czech technology and   this is currently new technology which the world  has not yet focused on and there are a number of   options that china will be able to do because if  they start with this new technology they would be   at an even level with a lot of other companies  around the world because the moore's law is we're   reaching it right at the end now and there's  only so much you can do with moore's law so   now you've got to look at different ways of doing  things and there are a number of different ways   and one of them is basically using a technology  called gate all around fets currently a finfet   technology is being used but a gate all around  fvts is where a finfet is placed on its side   and the gate is wrapped around it so so this is a  new type of technology that can be used for beyond   three nanometers there's other technologies you  can use as well there's one called graphene and   there's a couple of ways you can use graphene  and this is one way which is quite ingenious   actually the mit research team involves graphene  where a single atom thing sheets of graphite   are being used to copy integra crystalline  patterns from an underlying silicon wafer   onto adjacent top layer of identify and identical  material so it's called graphene cop photocopying   so you you can a you can basically get a chip  and photocopy it using graphene so this is a   brand new technique which has been tested around  the world so that could be one way so what is   graphene as you can see here the discovery of  an atomic layer of graphene by two researchers   at the university of manchester in england the  stoked expectations i could become a superior   replacement for silicon graphene's properties  have companies across industries salivating   its mobility is estimated to be 250 times out of  silicon and its flexibility and other properties   making ideal range of applications from battery  technology to optoelectrics such as touch screens   recent patents occur academic papers and research  publications testified to the widespread interest   of graphene so the why hasn't the world gone  to graphene as you can see it's not that easy   an integrated value chain including manufacturing  midstream retooling exists for silicon but   billions of investments is needed for recreate one  for graphene so a lot of the top companies like   tsmc samsung they've already invested billions  for for it to work with silicon uh so for a new   company um especially a chinese company if they've  invest a lot of money into creating a very similar   manufacturing chain supply chain for  graphene i believe they could be in   the driving seat in the next few years  graphene is also been tested by huawei as   well they're using huawei to test graphene  and basically graphene can replace silicon   in these transistors so graphene is a lot more  conductive than silicon is so so graphene could   be one way another way is galleon nitride gan and  gallium nitride could be used instead of silicon   and that's another method that you know it can be  used and why is gallium nitride so important you   can see here the bottom line is gallium nitride  technology can handle large electric fields in a   much smaller form factor than conventional silicon  while delivering significantly faster switching   and in addition gallium nitro technologies  can operate at higher maximum temperatures   than the silicon counter parts so you can see  gallium nitride can provide much more advantages   than a silicon can and then you also got graphene  as well graphene the next s-curve semiconductors   and graphene is a new technology and currently  has been tested by companies such as huawei   and the problem with graphene is there's not  a supply chain of graphene at the moment there   is not a big amount of graphene being produced  around the world so once graphene is starting   to be mass produced around the world for a cheap  price i believe that would take over um silicon   the reason silicon is so cheap is is is  widely abundant around the world it's   it's basically sand you can extract it from sand  so it's that's why it's so cheap and once graphene   cost of graphene um to build graphene goes down  and graphene is starting to be mass-produced   though you will see a lot of companies which are  probably turning into gra turning to graphene to   for their semiconductor needs and currently huawei  is focusing on graphene chips at the moment and it   and they are trying to build their own supply  chain with graphene in terms of producing   graphene and also testing with graphene chips as  well as you can see huawei revealed a new pattern   in the field of semiconductors and graphene filled  effect transistors and a lot of people don't know   much about huawei is huawei is not publicly  funded in the stock exchange doesn't have   shareholders it needs to please huawei shares is  split between his employees so all the employees   have a right or have it within their heart to do  everything they can to help huawei because while   we're doing well means they do well so all the  employees have a responsibility to work as hard   as they could to make sure huawei doesn't die  and huawei is able to produce new technologies   to survive and all of this has basically kicked  while way up the backside and they realize that   they need to be self-sufficient and i'm  sure they're doing everything they can   to be self-sufficient and huawei is one of those  companies which is happily sits in the background   until it comes out with a breakthrough and then  wow you know it's hit the world and the world is   like wow where did that where did that come from  for example 5g when huawei first came out with   5g the world just didn't know how to deal with it  because um and america was obviously quite scared   with the technological growth of huawei and and  they tried to suppress it um however you know   they cannot suppress a company like huawei with  the way they work and um and they're happy to sit   happily see in the background until they come  up with a breakthrough and they will continue   and they'll come back with a big bang and all of  this has kind of taught not only huawei but china   to be self-sufficient you cannot rely on america  and other countries you got to rely on yourself   so huawei will come back with the  new technology the good news is   companies like tsmc samsung they've already  invested billions and billions because these um   machines euv machines they cost 1.2 billion  each and they use the finfet technology they  

use silicon wafers so a lot of these companies  have already spent billions and billions on their   existing technology but you know with moore's  law it's coming to an end how long you know   it's not going to last very long it's you know  probably give it another five years 10 years but   you know if you want to move ahead in the  world you got to focus on new technologies and   right now if huawei focuses on graphene builds up  a very good supply chain of that graphene where it   can produce its own graphene and use graphene for  his own semiconductors and use his own machines uh   um duv machines a uv or like other other kinds  of laser lithiography machines while we would   be in a great great position you'll be even  better positioned than companies like tsmc and   something in the future because huawei would have  already built this great graphene supply chain   and companies like huawei can focus on things like  that because there's no shareholders pushing them   for you know accounts and budgets  every year so they are happily   they can sit in the back and and do things  like this and then come out with a breakthrough   so yeah i just wish them well really so let's kind  of catch up in the next few years see how they get   along i'm not saying they'll be successful or  not and it's definitely not going to be easy so   forget about huawei for a second let's talk  about china in general look guys i'm going   to be honest with you it's not going  to be easy it's not an easy technology   and this is going to be the biggest test  the biggest challenge china has ever had   this is even bigger than nuclear weapons this  is even bigger than building jet engines because   the current euv machines is the is the highest  form of technology a human has ever produced so   creating this supply chain creating these machines  creating semiconductors is not an easy thing plus   as you know moore's law is coming to an end as  well so so it is coming to an end so there is   issues especially with the trade war where china  is not able to buy machines to do this so they   have to make it all themselves so there are issues  out there um issue with the supply chain as well   um issue with talent there's not much talent  out there in china they're having to get a   lot of talent from taiwan but now i believe that's  banned so there are a lot of issues it's not going   to be easy but it is the greatest challenge that  china's ever had but then again china has overcome   all its greatest challenges had over the last you  know 20 30 years so i for one um i'm not going   to bet against them so let's see how they do over  the next few years it's not something that's going   to happen quickly it's going to take a few years  at least but one step at a time guys as you know   they've got 28 nanometers in the bag they're mass  producing more chips than any any other country um   they they are getting better and better producing  chips 28 nanometers already been mass-produced   um factories being produced all over the place  hundreds and thousands of chip companies opening   um they got 14 nanometers coming out next year and  plus smic has got a seven nanometer um product as   well the n plus one i believe uh so that's gonna  come out in the next few years so slowly every   year they are getting closer and closer narrowing  the gap but obviously it's going to take time by   step in the right direction but the main thing is  guys they are working on these five major steps   they're working on their supply chain they're  working on their equipment they're working on the   talent pool they're working on the manufacturing  they're working on the mass production   and they're also working on future technology and  the future technology they are also quite ahead on   some fields like ai quantum things like that and  sometimes you know using these semiconductors um   that are gonna go beyond one nanometers you need  things like ai and quantum and china is pretty you   know what's racing ahead with with those fields  even further than america i believe but anyway um   let me know what your thoughts are guys and um let  me know what you think and i'll chat to you in the   comments section um don't forget to like subscribe  um share whatever you can to help support the   channel if you really like the channel if you  really want to support what i do then don't forget   to buy me a coffee or join my patreon so thank  you very much guys and i'll see in the next video

2021-07-28 18:09

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