Stewart Randall, who tracks China's semiconductor sector at Shanghai-based consultancy Intralink, said that for NAND chips, the same equipment used to produce 128-layer NAND can also produce simpler 64-layer NAND.Ĭhina's foreign ministry spokesperson Mao Ning on Saturday called the move an abuse of trade measures designed to reinforce the United States' "technological hegemony". The blocking of equipment supplies for high-end chip production could also have a cascading impact on simpler chips, analysts said. "The advancement of memory will be limited as there is no opportunity to upgrade process equipment, no opportunity to expand production, and the market will be lost," Gu Wenjun, who leads research at Shanghai-based consultancy ICWise, wrote in a research note. The new regulations will now pose major hurdles for the two Chinese memory chipmakers, analysts said. In memory chips, industry watchers have pegged YMTC and CXMT as China's best hopes for breaking into the global market, going neck and neck with top players such as Samsung Electronics and Micron Technology. export controls."Ĭhinese foundries have a fraction of the global contract chip market, which is dominated by Taiwan's TSMC, but they control about 70% of the domestic market, underscoring Beijing's efforts to boost self-sufficiency in chips. "There will be plenty of boardrooms hosting top level meetings over the next few days considering the implications of U.S. "The measures will hobble the Chinese chip sector and will scupper numerous growth plans and potentially set back innovation in both the East and the West," said Danni Hewson, an analyst at AJ Bell. That's set to affect China's top contract chipmakers - Semiconductor Manufacturing International Corp (SMIC) and Hua Hong Semiconductor Ltd - as well as state-backed leading memory chipmakers Yangtze Memory Technologies Co Ltd (YMTC) and Changxin Memory Technologies (CXMT). companies must cease supplying Chinese chipmakers with equipment that can produce relatively advanced chips - logic chips under 16 nanometers (nm), DRAM chips below 18 nm, and NAND chips with 28 layers or more - unless they first obtain a license. The most immediate impact is likely to be felt by Chinese chipmakers, they said. The new controls also come at a time when the global chip industry is already facing major headwinds from tumbling demand post-COVID in computers, smartphones and other electronic devices and has warned of weak revenue. Experts said the new rules will have a broad impact, slowing China's efforts to develop its own chip industry and advance commercial and state research involving military weapons, artificial intelligence, data centres and many other areas that are powered by supercomputers and high-end chips.
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