Last year, I wrote about Semicon China, a series of exhibitions focused on the semiconductor industry. I explained how China was very contradictory, on the one hand saying it is open to foreign businesses, on the other that most companies marketed themselves with phrases such as ‘Made in China’ and ‘self-sufficient’. Despite all this, most serious foreign players were present as China is still often their largest market.
This year, the show was even bigger again, covering seven large halls and having nearly 1,300 exhibitors participate. South Korea did not have its own pavilion this year, but Taiwan still did, as did Singapore. All the major foreign players were still present, including photolithography firms such as ASML, Canon, and Nikon.
This year though, was about one thing: a previously little-known company called SiCarrier.
SiCarrier
SiCarrier is invested in by the Shenzhen Major Industry Investment Group, a Shenzhen Government investment vehicle which has also invested in Peng Xin Wei and Swaysure, both of which, like SiCarrier, are Huawei-linked companies.
I don’t think I have seen any booth at any expo ever as busy as SiCarrier’s at this year’s Semicon China. It felt like more than 1,000 people surrounded its booth during its press conference, and I had to fight to get anywhere near the front.
Outside of the industry not many people had heard of this company until this week, but in the build up to the show it became apparent that SiCarrier was finally ready to exhibit for the first time. It was ready to show what it had been working on in the past four years since its founding in 2021 to break the restrictions on China’s semiconductor industry.
Aside from photolithography equipment, it showed off almost every other type of equipment in the semiconductor fabrication process. Atomic layer deposition (ALD), chemical vapor deposition (CVD), physical vapor deposition (PVD), epitaxy, etching, and annealing. While it is interesting it is still not exhibiting photolithography tools, however it has said it has such equipment capable of 28nm. Perhaps it is keeping this low-profile for now, waiting until it has something more earth shattering,
However, what it did exhibit is a threat to companies such as LAM, AMAT, and TEL. For example, speaking with a member of staff on its booth I learnt that SiCarrier’s etching equipment is similar to tools from AMAT like the Sym3, and has a lead-time of 6-12 months – seemingly faster than others in the industry. And while staff admitted that right now they do not have immediate plans to export the equipment, they are not ruling it out.
The company’s goals are clear: to break China’s reliance on tools from the US, Japan, and Europe. To get this far in four years is impressive.
SMEE pushed aside?
What I also found interesting at Semicon was the lack of interest in Shanghai Microelectronics Equipment (SMEE). For a company that recently filed a patent for an EUV tool, this was rather strange. Its booth was more or less empty and the product brochures it handed out did not mention anything about photolithography, only temperature control equipment and interferometers. Where is the 28nm DUV equipment promised in 2023? I had to go around to the back of its booth, in a dark covered up corner to even see a mention of its equipment capable of 90nm, almost as if it were embarrassing to even mention it. Having been founded 23 years ago, perhaps SMEE has a chip on its shoulder around SiCarrier’s meteoric rise as well as the success of Naura and AMEC. There is a lack of semiconductor talent capable of these breakthroughs, and to date it seems SiCarrier, AMEC, and Naura have been able to spend the money to poach it from abroad; perhaps SMEE is struggling.
Conclusions
Every year the US export restrictions continue is another year in which we see a Chinese company edge ever closer to Beijing’s goals. However, the genie is out of the bottle and even cancelling any restrictions will not stop the path China is on now. It has a clear goal to break the stranglehold other countries have over it and it won’t stop even if it succeeds. Its goal is not to be on a par with global players, but to surpass them.
Of course, there are still a lot of hurdles for Chinese companies to overcome. We still don’t see any globally competitive DUV or EUV equipment, and there are still a lot of questions about SiCarrier’s actual performance. In the near term though, the China revenue of LAM, AMAT, TEL, and others could be under threat. The immediate market for this new Chinese equipment is domestic. In 2024, 42% ($7.3bn) of LAM’s revenue came from China, AMAT’s China sales were $10.1bn, and TEL $5.4bn. For all these companies China is by far their largest market. There are now at least three serious Chinese companies that threaten this.
