Huawei leading China chip dream revival

Construction at the shuttered DRAM fab Fujian Jinhua Integrated Circuit Co. (JHICC) has resumed, reports the Nikkei. JHICC had to shut when US sanctions on the supply of US equipment were imposed.

Across the way from JHICC, packaging specialist Quliang Electronics is building a second site the size of 20 soccer fields.

In Shenzhen, a fab is being built for PengXinWei Integrated Circuit Manufacturing Co.  

The similarly naned PengXinXu Technology Co plans to build a fab in Shenzhen.

Also building a fab in Shenzhen is the 2022 DRAM startup SwaySure Technology.

All three companies – PengXinWei, PengXinXu and SwaySure – are owned by the Shenzhen government.

SMIC, the Beijing and Shanghai foundry, has built production lines free of American chipmaking equipment which it calls “Non-A lines.”

SMIC’s best process on a Non A-line is the 2008-vintage 40nm process. The company’s current target is to set up, in the next two years, a 28nm  line which does not use US manufacturing equipment.

All of this is  good news for China’s top five  equipment   manufacturing companies – Naura, AMEC, ACM Research, Hwating and Piotech – whose combined revenues jumped 121% from 2019 to 2021 reaching $2.3 billion last year.

Having a tough commercial organisation heading up its chip effort should produce very much better results for China than the loose, diffuse collection of municipal governments, incompetently managed federal funds and outright rogues who dissipated the $200 billion of previous support funding.

However Huawei still has to crack the very tough nut of developing advanced chip-making equipment. Estimates suggest this could take a couple of decades.