चीन का tech ecosystem

While China’s technology demonstration deserves appreciation, its self-sufficiency drive faces several hurdles

Huawei, the Chinese smartphone giant,

has created ripples within the strategic and business community with its newly unveiled Mate 60 Pro which houses the Kirin 9000 processor.

 The chipset reportedly used Semiconductor Manufacturing International Corp (SMIC)’s second-generation 7nm fabrication technique, thereby demonstrating China’s capability to manufacture a 7nm chip.

Challenges before China’s quest

self-sufficiency in manufacturing advanced chips

1 Consequently, observers have claimed that the capability marks a major breakthrough in Beijing’s drive to attain self-sufficiency in manufacturing advanced chips. 

2 The fact that China succeeded in achieving this feat despite American sanctions on key semiconductor technologies has led many to even question the efficacy of the sanctions. 

Processor

1 To begin with, the fabrication technique used by Huawei-SMIC to manufacture the Kirin 9000 processor is highly inefficient. 

2 The wafer yield (a metric of efficiency) of the deployed technology is way less than 50%.

3  In contrast, Taiwan’s Taiwan Semiconductor Manufacturing Company Limited (TSMC)’s 7nm fabrication technique has a wafer yield in excess of 90%. 

Wafer yield, or the percentage of accepted die per wafer

is a critical metric for semiconductor operations. All fab processes must ramp to steadily create consistent wafers with profitable average yield

First Cost and China's technology 

 This makes the SMIC’s process extremely expensive — up to 10 times the costs incurred by other players in the market, and therefore highly uncompetitive.

 Second, the 7nm fabrication technique represents the zenith of China’s capabilities with the available Deep Ultraviolet (DUV) lithography tools

1  The United States’s sanctions that cut off Beijing’s access to the most advanced lithography tool in the market — the Extreme Ultraviolet (EUVs) — meant that China had to rely on DUVs to fabricate the Kirin 9000 chipset.

lithography system

is essentially a projection system. Light is projected through a blueprint of the pattern that will be printed (known as a 'mask' or 'reticle'). The blueprint is four times larger than the intended pattern on the

2  While DUVs can technically be used to make 7nm chips, the process is extremely messy and inefficient, thus lowering its yield. 

3 For instance, the SMIC technique used multiple rounds of masking or layering on the wafer to manufacture a 7nm chipset, leading to multiple exposures.

4  On the other hand, the TSMC with the EUVs can perform the same task of high complexity with a single exposure.

Third, it is doubtful that Huawei-SMIC could produce the current chipsets on a large scale

1 The fact that the U.S. and its allies have restricted China’s access to even DUVs lately means that large-scale production of 7nm chips would be a challenge for Chinese companies.

2 Thus, low yield rates, inefficient and costly procedures along with difficulty in achieving the scale are likely hurdles in Huawei’s attempt to commercialise its new technology product.

4  This is significant because the failure to achieve commercialisation will impact incremental innovation as they reinforce each other. And products that fail to innovate alongside their competition eventually fade away.

The U.S. and China systems, a comparison

First, the extensive and distributed nature of the U.S.-led tech ecosystem 

1 allows individual countries to achieve functional specialisation according to their respective comparative advantages. 

2 कौन किसमे आगे ?

The existing supply chain — where the 

🌺U.S. specialises in EDA tools and designing,

🌺 the Netherlands in producing lithography tools, 

🌺Japan in manufacturing specialised materials, and 

🌺Taiwan and South Korea in fabrication — corroborates the claim.

अब  चीन की बात करते हैं 

1 China, on the other hand, not only has the mandate to become self-sufficient in each segment of the value chain 

2 but has to also achieve sophistication in each of these to remain competitive.

3  Achieving specialisation in any one segment of the chip value chain itself is highly capital intensive; to achieve so in each of them is impossible.

4  It is also important to remember that advanced chips are only one of the many core technologies that China aims to become self-sufficient in. 

5 Given that the Chinese ecosystem is not as elaborate as the U.S.’s and is rather isolated, there are limits to Beijing’s potential with its finite resources.

वहीं पर अमेरिका और उसके साथी 

1 As for the U.S.-led ecosystem, the costs can be distributed among the participating countries, most of which have much higher per-capita income than China.

2  Therefore, to compete with a larger pool of resources, 

China will need to strike a higher success rate on every dime it spends on research, 

which is difficult to achieve given that breakthroughs in basic research are capital intensive and may not yield success as often. 

3 If that alone is not enough to burden the scientific community, the pressure to perform and deliver in China’s authoritarian system further compounds the problem. 

China’s appetite to absorb failures is extremely limited when compared to the U.S. and its allies

This makes for quite an unconducive environment for innovation given that it thrives best in a free environment. 

Finally, the U.S.-led tech ecosystem allows it to 

🌺source talent from diverse regions, 

🌺owing to its open immigration policy 

🌺and distributed network. 

China, on the contrary, will have to solely rely on its national or overseas talent pool as the movement of human capital to China becomes more difficult due to deepening rivalry in the high-tech sectors.

Going forward, China’s tech ecosystem faces challenge to succeed in everything all by itself. 

It may score a victory in odd areas, but replicating the feat in every single domain is impractical.