Tensions between the U.S. and China have proved lucrative for some Japanese companies. Nikkei Asia today reported that prices for used chip-making equipment, which aren’t subject to U.S. restrictions imposed in 2020, have risen 20% on average as a result of increased demand from Chinese semiconductor manufacturers.
The U.S. imposed new sanctions on SMIC, the largest semiconductor manufacturer in China, in September 2020 to prevent it from purchasing new chip-making equipment. It also added the company to the Entity List in December 2020 to make it even harder for other businesses to supply it with American-developed technology.
Used chip-making equipment sellers in Japan aren’t subject to those same restrictions. Nikkei Asia said those sellers have struggled to keep their products in stock, which has led to significant price increases over the last year. The value of critical equipment such as lithography systems reportedly tripled in that timeframe.
Nikkei Asia said that “nearly 90% of used machines appear to be headed to China,” per a source at Mitsubishi UFJ Lease & Finance, and that another anonymous source at an unidentified used equipment dealer claimed, “machines that were basically worthless several years ago are now selling for 100 million yen [$940,000].”
Some of that equipment is being used on production lines, but Nikkei Asia said that some of it‘s merely being hoarded just in case it could prove useful in the future. It doesn’t make a difference to the companies selling that equipment; they’re making significant profits and selling through stock they otherwise would’ve sat on.
That isn’t just true of Japanese companies. Bloomberg reported earlier this month that “Chinese businesses bought almost $32 billion of equipment used to produce computer chips from Japan, South Korea, Taiwan and elsewhere” in 2020. That was “a 20% jump from 2019,” according to the report, and that growth could continue.
The end goal for China is self-sufficiency. Companies in the country have made progress on their own chip-making equipment so they won’t have to rely on American technologies, for example, and SMIC has sought other ways to reduce the U.S. blacklisting’s effect on its ability to advance the Chinese semiconductor industry.
China’s also worked to develop its own CPUs, GPUs, memory, and other components so it won’t have to rely on Western products. But until it can replace American chip-making equipment entirely, assuming the U.S. won’t budge on its restrictions, the country’s going to have to continue to stockpile these once-outdated machines.
It might take a little longer, but China will definitely get there. As for what happens after that is best left on a cliffhanger without getting too deep in politics.
ChiComs are now following the same track of buying used to develop their own internal computer technology.
The primary intent is to reverse-engineer the equipment, and to begin manufacturing their own.
I also like the selective history. Think what would have happened to China if Japan won the Pacific war. The 'East' was much more harmful to China then the west in its wildest aspiration.
ChiComs are large purchasers so they will buy the same series/model equipment from more than one fab around the world thus they will have spares for parts. If it was possible to re-engineer or calibrate the old equipment for the next shrink it would not have been sold.
As we all know performance improvements with smaller shrinks are incremental, so if the ChiComs purchase used equipment suitable for say 14nm, they can produce product still technologically competitive with 10nm or less but at a much more competitive price for sale/use in China, in the third world or inclusion in finished products.
China has a lot to answer for in both Medieval and ancient history. Mongolians are worse, the Mongolian invasion (making up portions of China) were merciless.
China is flouting laws now left right and centre, and though we cannot point fingers at the Chinese Public, the communist leadership is despicable.
When the Chinese systems are fabricating in their plants, only 2 parts of that 10 stage system needs changing in a die shrink, it being the ASICS and the Ultraviolet Lasers that mark and cut. and the Laser element is really a recalibration of equipment more than a replacement. Sometimes armatures need new gear systems, but like most electronics, the Fab plants are Modular, and only 1 or 2 parts of the fab system needs to be changed.