On October 7, 2022, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) website published the detailed rules for the U.S. Department of Commerce to Implement New Export Controls of the People's Republic of China on Advanced Computing and Semiconductor Manufacturing.
Source: BIS
This document, on the basis of the previous "Chips Act" promulgated by the United States, more forcefully blockades China's chip manufacturing industry.
Source: BIS
The detailed rules mainly restrict the export of advanced process semiconductor equipment from the United States to China. In addition, it is specially stipulated that:
U.S. citizens are not allowed to work, invest, or provide technical assistance in Chinese semiconductor manufacturing, IC, supercomputer manufacturing research institutes, companies, factories, and other institutions without permission.
Among them, the restrictions on semiconductor manufacturing projects will take effect on October 7, 2022, and the restrictions on advanced computing and supercomputers will take effect on October 21, 2022.
In terms of whether U.S. citizens can work and invest in related fields in China, due to the premise in the fine print "whether it is licensed", we still do not know how large and broad the scope of the approval will be.
However, the impact is already starting to occur.
According to the Wall Street Journal, Yangtze Memory Technologies Co. is facing suspension of support from key vendors such as KLA Corp. and Lam Research Co. (LRCX):
Starting October 12, 2022, these U.S. suppliers suspended support for Changjiang Storage's installed equipment, suspended the installation and commissioning of new equipment, and temporarily withdrew their employees from Changjiang Storage's factory.
Yangtze Storage is a well-known NAND flash memory (also known as the memory particles required for solid-state drives) in China, which has grown very rapidly, capturing 4% of the global market share of NAND within a few years, and was expected to reach 7% this year.
The suspension of support from KLA and Lam Research will have an impact on the rapid development of Yangtze Storage.
KLA is a semiconductor manufacturing related process control and yield management company, the company is known for inspection and testing equipment; Lam Research, on the other hand, is famous for its etching machines. Yield control and etching machines are very important for the semiconductor industry.
The high-end microchips on the market now, minimalistly explained, are actually "carved lattices on the wafer", and these carved lattices form a large and complex circuit for realizing various functions. We often say that photolithography is to draw drawings of latticees on the wafer, and etching is to implement the real "engraving" of latticees according to the drawings engraved by photolithing.
At the same time, there are about hundreds of steps to manufacture a high-end chip, so it is very important to control the process and pursue yield at this time.
For example, do you think the yield rate of 99% in a single operation is high? It seems quite high, right, but there are 100 steps, each step is a 99% yield rate, do you know what the final yield is?
The answer is: 0.99^100=36.6%, which means that most of the made cannot be used. Therefore, process control and yield management are very, very important for chip manufacturing companies.
Now, KLA and Lam Research's suspension of support for Yangtze Storage will undoubtedly affect the two key points of good product control and etching, resulting in the inability of Yangtze Storage to expand production and development as planned.
And the policy itself has also had an impact on related companies in the United States:
Shares of Applied Materials, KLA, and Lam Research were affected by the implementation of the policy, and their shares all fell more than 20 percent last month as Chinese customers contributed about 30 percent of their revenue.
However, according to the Wall Street Journal, Samsung Electronics and Hynix have been granted exemptions from the ban, and their factories in China can continue to produce normally.
Samsung Electronics and Hynix jointly occupy more than 50% of the NAND market, and they are both Korean companies and allies with the United States.
The purpose of the United States to curb the development of Chinese enterprises and maintain its own market position and that of its allies can be clearly seen. Other semiconductor industries other than storage will face similar problems.
The Cyber Iron Curtain has fallen.
But past experience has taught us that we can always find a way out.