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