TAIPEI -- A Chinese semiconductor equipment maker linked to Huawei has been quietly developing a wide range of machines to replace offerings by ASML and other foreign rivals to help China resolve the most painful supply chain choke point created by U.S. export controls, Nikkei Asia has learned.
Shenzhen SiCarrier Technologies, backed by the Shenzhen government, has been developing equipment in chip fabrication and has set machines from companies such as ASML, Applied Materials and Lam Research as its benchmark, sources briefed on the matter said. The machines it is working on involve lithography, chemical vapor deposition, measurement, physical vapor deposition, etching and atomic layer deposition, all fields that are currently dominated by companies from the Netherlands, U.S. and Japan, they said. SiCarrier has been working closely with Huawei's growing team of specialists in chip production and chip equipment making, multiple sources with knowledge of the matter said.
SiCarrier claims it has built critical lithography machines that can produce 28-nanometer chips or less advanced chips, a segment currently dominated by ASML, Nikon and Canon, sources briefed on the matter said. They added, however, that it is still hard to verify whether the company will be able to smoothly commercialize such machines.
Chips in the 28 nm range are viewed as mature technology, far less advanced than chips built with 5 nm or 4 nm processes that currently only TSMC, Samsung and Intel are able to produce. Such chips can are important, however, as they are used in a wide range of applications, including microcontrollers for cars and advanced robotics.
"They have started many projects across many different process steps in chipmaking, basically hoping to build all types of machines. They are working very closely with needs and requests from Huawei. ... Some projects involve hundreds of workers, while others involve thousands of engineers," said one chip executive with knowledge of the matter.
Another source familiar with the matter said SiCarrier has been aggressively hiring experienced engineers from foreign peers in recent years, especially after tighter U.S. export controls led many American chip tool makers in China to downsize. "It is a young company, but they've managed to hire and form a big team with experienced talent from the industry," said a source working for a Chinese chip tool maker.
In a recent post on WeChat, SiCarrier said it will launch a wide range of chipmaking equipment machines during the SEMICON China industry fair this week, including a new atomic layer deposition (ALD) tool named Alishan after a famous mountain in Taiwan.
Huawei has dedicated substantial resources to developing chipmaking equipment, actively recruiting top engineers with experience at chip leaders such as TSMC and Intel, and major global equipment manufacturers including ASML, Applied Materials, Lam Research, KLA, Tokyo Electron and Screen. The Chinese tech giant is also building a massive research and development complex for chipmaking machines in Shanghai. Industry executives told Nikkei Asia that Huawei has been collaborating closely with SiCarrier to jointly enhance application engineering expertise and identify key production challenges when implementing chip manufacturing processes.
Neither Huawei nor SiCarrier responded to Nikkei Asia's request for comment as of publication.
Founded in August 2021, SiCarrier says its major stakeholder is Shenzhen Major Investment Group, a Shenzhen government investment vehicle. Shenzhen Major Investment Group is also a major backer of Huawei-linked chip manufacturers including PengXinWei Integrated Circuit Manufacturing Co and SwaySure Technology, Nikkei Asia earlier reported.
Access to chipmaking equipment is a major bottleneck in China's semiconductor development. Washington has restricted sales of advanced semiconductor machines to China, and its allies the Netherlands and Japan have implemented similar measures. Late last year, the Biden administration imposed even stricter export controls on chip technology and placed almost all prominent Chinese chip equipment manufacturers on trade blacklists.
Washington's export controls have spurred China to step up its efforts to produce chipmaking equipment. The country has also found many creative ways to get around U.S. export controls, such as buying advanced AI chips via multiple third party distributors outside China. China's top chip equipment builder Naura Technology has been a key beneficiary of the localization push. Its revenue has grown nearly seven-fold from 2018 through 2023, while its second-largest domestic supplier, Advanced Micro-Fabrication Equipment Inc. China (AMEC) saw its revenue grow 282% in the same period.
Most American chip experts still view export controls as an important measure for delaying China's advances in chips needed for advanced applications such as artificial intelligence.
Gregory Allen, director of the Wadhwani AI Center at the Center for Strategic and International Studies (CSIS), said export controls will make it more difficult for Chinese companies to receive foreign support in advancing the reliability and competitiveness of their technology. "Export controls did increase the desire of both the Chinese government and Chinese companies to increase the capabilities of local semiconductor equipment providers, but that is not the same thing as saying that export controls caused accelerated indigenization, which depends upon more than just desire."