According to foreign media reports, the United States will expand trade sanctions against China in the near future, including the possibility of blacklisting the Chinese wafer foundry SMIC. According to the analysis of the semiconductor industry, if this happens, the shipments of IC design factories such as Qualcomm and Broadcom, which have placed a large number of orders in SMIC, will be severely impacted. On the contrary, Taiwan wafer foundries and NOR Flash factories will welcome more orders from customers. However, due to the overall tight production capacity of Taiwan’s wafer foundries in 2021, the orders that can be undertaken are relatively limited.
According to the data, SMIC has 8-inch factories in Shanghai, Tianjin, Shenzhen and other places with a total monthly production capacity of 385,000 pieces, mainly producing 0.35 micron to 90 nanometer process. In addition, SMIC also has 12-inch factories in Shanghai and Beijing, with a total monthly production capacity of 195,000 pieces. Among them, the main process of the two 12-inch factories in Beijing is between 0.18 micron and 24 nanometers, and the Shanghai 12-inch factory provides 14 nanometer fins. Type field effect transistor (FinFET) advanced process.
At the end of September this year, SMIC issued an announcement confirming that the U.S. Department of Commerce had sent a letter to its suppliers stating that all U.S. equipment, accessories, and raw materials exported to SMIC are subject to export control regulations, and they must obtain permission from the U.S. competent authority. Shipment. Although SMIC has always clarified that it does not involve military chips, the attitude of the United States may remain tough after the election. Foreign media reported that the United States may blacklist SMIC. In addition to restrictions on equipment and material procurement, non-Chinese customers It is also inevitable to transfer orders to Taiwan or South Korea.
SMIC’s top two overseas customers, Qualcomm and Broadcom, mainly produce power management ICs with a 0.18-micron process in an 8-inch plant. Some 28nm RF components are also entrusted to SMIC. Due to U.S. export control restrictions and the threat of possible blacklists, Qualcomm and Broadcom have successively proposed to increase wafer production to Taiwanese foundries such as TSMC, UMC, World Advanced, and PSMC for supply chain security. volume requirements. Among them, TSMC has benefited from the transfer order effect of Qualcomm and Broadcom. The 28-nanometer production capacity will be fully loaded in the first half of next year, and the 8-inch plant will be full until the second half of next year.
According to industry analysis, Qualcomm orders at least 600,000 power management IC wafers from SMIC every year, accounting for almost 40% of Qualcomm’s own supply. The supply of equipment and chemical materials will be cut off, SMIC may find it difficult to maintain normal operation, and Qualcomm will immediately lose a large supply of power management ICs. In fact, after entering the 5G generation, the usage of radio frequency devices and antenna modules in mobile phones has increased significantly, and the usage of supporting power management ICs has also increased significantly, which also makes mobile phone chip manufacturers such as Qualcomm need more power management IC production capacity .
Power management ICs are mostly produced on 8-inch wafers due to process issues. Although Qualcomm has transferred orders to Taiwan-based fabs, there is currently a serious shortage of 8-inch wafer foundries regardless of TSMC, UMC, and the world. It can be seen that the order volume is significantly greater than the production capacity by 30-40%. Even if the price is increased, it may be difficult to arrange the production capacity in the first half of 2021. Even if Qualcomm successfully obtains the production capacity of Taiwan’s three major wafer foundries, they can supply Qualcomm’s 8-inch production capacity. will also be very limited.
The industry expects that if SMIC is included in the U.S. trade blacklist, it will lead to an increase in the effect of order transfer. Next year, the production capacity of 8-inch wafer foundry will be tight throughout the year. It is expected that the price of foundry will continue to rise, including panel driver IC, Power management ICs, power semiconductors, etc. will also continue to be in short supply and prices will rise due to insufficient foundry capacity.
In this context, if SMIC is blacklisted, Qualcomm’s power management ICs will have a long-term and serious shortage problem, which is bound to directly affect the shipment of its 5G mobile phone chips (Qualcomm’s power management ICs Chips that belong to mobile phone chips), Qualcomm’s mobile phone chip market share will decline. In contrast, MediaTek has previously reported that it has obtained a large amount of 12-inch power management IC wafer production capacity from PSMC, which is expected to grab more of Qualcomm’s 5G mobile phone chip market, and the annual 5G mobile phone chip shipments are expected to Multiplied growth.
In addition, if SMIC is blacklisted, the NOR Flash used by GigaDevice for Apple’s AirPods will also be manufactured in SMIC with a 65/55nm process. The market expects that GigaDevice’s orders will be transferred to Winbond and Macronix.
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