#Challenge30 days to write a diary in the headlines ##Headline Creation Challenge #After global chip overcapacity, chip giants are cutting capital, TSMC cutting $8 billion, Intel cutting $3 billion, and Qualcomm cutting $1 billion.
In addition, the giants are also cutting orders for engraving machines, and TSMC has cut 40% of EUV engraving machines. ASML said it allocated more production capacity to Chinese manufacturers due to fewer orders from other customers.
But SMIC's international actions took the outside world by surprise.
As chip giants are cutting capital expenditures, SMIC maintains capital expenditures comparable to 2022, which is expected to exceed 43 billion yuan.
Unexpectedly, ASML said there was overcapacity for advanced processes, but there was still a shortage of mature processes. SMIC was the first country to expand capacity in mature processes, but now it has suddenly slowed down the expansion of mature processes.
According to SMIC's release, it will expand production in an orderly manner, and manufacturers such as TSMC are expanding mature process capabilities.
In addition, SMIC's official website 14nm OEM information also suddenly disappeared, only introducing 28nm and above chips.
As a result, many questioned what happened to SMIC. First 28nm, then 14nm. After all, SMIC can mass-produce chips above 14nm, and the yield rate has reached the world's leading level.
In addition, SMIC has also trial-produced N-process chips on a small scale to achieve the expected results, 7nm R&D tasks have been completed, and 5nm is under development.
According to people familiar with the matter, SMIC's move is for a reason.
First, advanced craftsmanship and sustained profitability.
SMIC has seized the opportunity of the 28nm maturation process and expects to have a production capacity of 700,000 8-inch wafers by the end of this year.
With the addition of manufacturers such as TSMC, it will inevitably lead to the rapid saturation of mature process capacity.
The data shows that equipment depreciation costs are the main factor affecting net profit. SMIC expands production capacity as needed to reduce equipment depreciation costs as semiconductor technology is replaced every 6-7 years.
In other words, SMIC's slowdown in expanding production is to see through the overcapacity of mature processes and the impact of equipment depreciation on profits, so it slows down plant construction and invests more in advanced process research and development.
Second, SMIC is developing low-key.
The United States has constantly revised its rules, restricted the transportation of products such as lithography machines through tripartite agreements, and even deliberately cut off the supply of advanced technology.
In order to keep a low profile, SMIC withdrew the relevant information.
After all, SMIC has completed the 7nm research and development task, but the follow-up news will not be announced. A similar situation occurs with the N 1 and N 2 processes.
The key is that SMIC foundry 14nm chips as early as three years ago, and the yield rate is not bad, and it is really meaningful to remove the relevant chips at this time.
Finally, the order issue.
The data shows that 75% of SMIC's orders come from domestic manufacturers, and 14nm and other process orders basically come from domestic manufacturers. 28nm/14nm contributes limited revenue, and it is also possible to incorporate processes such as 14nm into 28nm.
In addition, the U.S. continues to restrict shipping, SMIC still needs to import some equipment and raw materials, product expansion is not expected to go smoothly, and orders come from domestic manufacturers.
Therefore, in terms of advanced processes such as 14nm, SMIC serves a small number of domestic manufacturers, and naturally does not need to introduce advanced processes such as 14nm.
However, SMIC's capital expenditure will remain above 43 billion yuan in 2023, and it is clear that it will not give up on advanced technologies.
SMIC is also accelerating cooperation with domestic manufacturers to position more semiconductor equipment to better develop advanced technologies.
Based on the above analysis, what are your different views/suggestions on this?
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