China is 5 generations behind the world in the chip industry: The difference will get bigger!

In 2020, Chinese chipmaker Semiconductor Manufacturing International Corp. (SMIC) was two or three generations behind global leaders. According to recent reports, the country’s chip industry is at least five generations behind today, after the US has imposed several sanctions on the Chinese semiconductor industry. According to Chinese experts in the industry, the gap may become even larger.

During the last two years of US administration, 15 semiconductor-focused sanctions have been introduced to keep China’s semiconductor manufacturing technologies behind global leaders, namely Intel from the US, Samsung from South Korea and TSMC from Taiwan.

Gap between China and the world widens

In 2020, SMIC was about to begin producing chips in its 7nm-class fabrication process, which had a logic transistor density similar to TSMC’s N7 and Intel’s 10nm. At that time, SMIC was several generations behind TSMC, which was preparing to begin chip production in the N5 (5nm class) process. But sweeping sanctions imposed by the US government on October 7, 2022, followed by Japan and the Netherlands in 2023, set the Chinese semiconductor industry back at least a decade.

A special license is now required to sell semiconductor manufacturing equipment to a Chinese enterprise used to make logic chips with non-planar transistors in 14nm/16nm and below nodes, 3D NAND with 128 layers or more, and DRAM memory chips with 18nm half-range or less. This limits China’s semiconductor industry to 28nm and larger nodes – unless they develop their own particleboard manufacturing tools or are granted export licenses.

Its effects will be felt in all areas.

The consequences of these restrictions are being felt in China’s semiconductor world. SMIC, one of China’s pioneers in the semiconductor space, once spoke of its advances in 14nm and 12nm nodes. However, in mid-2023, everything mentioned of these technologies was removed from SMIC’s website.

Despite these setbacks, some experts believe China can strengthen its domestic semiconductor equipment capabilities thanks to the US’s barriers. If that doesn’t happen, the gap between China’s semiconductor industry and global leaders will widen unless there are other changes in government policy. This will affect China in all areas. As it is known, semiconductors are used in almost every field, from smartphones to automobiles, from airplanes to refrigerators and the artificial intelligence industry.