SMIC Reportedly On Track to Finalize 5 nm Process in 2025, Projected to Cost 40-50% More Than TSMC Equivalent

[T0@st]

According to a report produced by semiconductor industry analysts at Kiwoom Securities—a South Korean financial services firm—Semiconductor Manufacturing International Corporation (SMIC) is expected to complete the development of a 5 nm process at some point in 2025. Jukanlosreve summarized this projection in a recent social media post. SMIC is often considered to be China's flagship foundry business; the partially state-owned organization seems to heavily involved in the production of (rumored) next-gen Huawei Ascend 910 AI accelerators. SMIC foundry employees have reportedly struggled to break beyond a 7 nm manufacturing barrier, due to lack of readily accessible cutting-edge EUV equipment. As covered on TechPowerUp last month, leading lights within China's semiconductor industry are (allegedly) developing lithography solutions for cutting-edge 5 nm and 3 nm wafer production.

Huawei is reportedly evaluating an in-house developed laser-induced discharge plasma (LDP)-based machine, but finalized equipment will not be ready until 2026—at least for mass production purposes. Jukanlosreve's short interpretation of Kiwoom's report reads as follows: (SMIC) achieved mass production of the 7 nm (N+2) process without EUV and completed the development of the 5 nm process to support the mass production of the Huawei Ascend 910C. The cost of SMIC's 5 nm process is 40-50% higher than TSMC's, and its yield is roughly one-third." The nation's foundries are reliant on older ASML equipment, thus are unable to produce products that can compete with the advanced (volume and quality) output of "global" TSMC and Samsung chip manufacturing facilities. The fresh unveiling of SiCarrier's Color Mountain series has signalled a promising new era for China's foundry industry.



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[thesmokingman]

Grains of salt...

 

[watzupken]

The numbers in this articles are likely all "guesstimate", rather than based on facts. The Chinese are hard at work trying to improve on their end all these years, while the West is spending half its time trying to downplay China's advancement but to their own detriment. Which is why from time to time, we often get surprised by the speed they are improving technologically.

 

[redeye]

yea so?… in the monopoly business, when you have your own machine that works, the leader ASML, will come by and say hey wanna buy our machines?, they are better!. Moot point if our (ASML) machines are “export controlled” … just get the dutch gov to give you a export license… of course there is a 4 year wait list, but we want your business!, the US can only order so many machines…

i wonder if the dutch government in the best Mob Boss voice says to the US ” forget about Greenland, or no ASML machines…“ or ” say hello to my little friend, tariffs! Big wonderful 25% tariffs! lol”

 

[TheinsanegamerN]

yea so?… in the monopoly business, when you have your own machine that works, the leader ASML, will come by and say hey wanna buy our machines?, they are better!. Moot point if our (ASML) machines are “export controlled” … just get the dutch gov to give you a export license… of course there is a 4 year wait list, but we want your business!, the US can only order so many machines…

i wonder if the dutch government in the best Mob Boss voice says to the US ” forget about Greenland, or no ASML machines…“ or ” say hello to my little friend, tariffs! Big wonderful 25% tariffs! lol”

I'm not sure why they would do that....the Us is the largest market for ASML and pissing them off wont do wonders. Why would ASML care about Greenland?

China cannot get an export license from the dutch for ASML machines, due to trade sanctions. Thats why they have invested so much in SMIC.

 

[Rightness_1]

DOA! What is the point of opening a "new" plant offering a 5-year-old production processes for 40% more cost that makes it even more expensive than using TSMC's 4N node?

 

[medi01]

Matters to China that wants autonomous everything, cause, you know, gotta expand at some point.

 

[Geofrancis]

DOA! What is the point of opening a "new" plant offering a 5-year-old production processes for 40% more cost that makes it even more expensive than using TSMC's 4N node?

Because those processes aren't available to a large part of the worlds population.

 

[TheinsanegamerN]

DOA! What is the point of opening a "new" plant offering a 5-year-old production processes for 40% more cost that makes it even more expensive than using TSMC's 4N node?

That 5 year old node is still advanced enough for most things and having that capacity removed their chain to US or other foreign manufacturing. Oh yeah, and 5nm is the underpinning of CURRENT AMD and nvidia GPUs, and AMD CPUs.....

As a reminder, 2 years ago everyone said they'd never manage 28nm tech. now they are doing 5nm. Where do you think they are going next?

 

[Rightness_1]

As a reminder, 2 years ago everyone said they'd never manage 28nm tech. now they are doing 5nm. Where do you think they are going next?

At 50% higher prices than TSMC, I'd say bankruptcy. There is other competition you know!

 

[Vayra86]

yea so?… in the monopoly business, when you have your own machine that works, the leader ASML, will come by and say hey wanna buy our machines?, they are better!. Moot point if our (ASML) machines are “export controlled” … just get the dutch gov to give you a export license… of course there is a 4 year wait list, but we want your business!, the US can only order so many machines…

i wonder if the dutch government in the best Mob Boss voice says to the US ” forget about Greenland, or no ASML machines…“ or ” say hello to my little friend, tariffs! Big wonderful 25% tariffs! lol”

That's not how we do things.

We secretly create a deal we benefit from, and then turn around and tell everyone how hard life is and everyone should talk about it a bit more, while in the meantime, most parties get something they want.

We're creating steel the US can't do without. We create machines the US can't do without. At the same time, we depend on them to take our steel and machines. Mutual dependancies Trump thinks he can just waltz right over and erase.

Good luck with that. So far he's achieved nothing, except trust erosion, which ultimately backfires on the US.

The China situation is different. You're looking at a country that has no freedom of speech here. I'm sure they have a fantastic 5nm process. Economically though, its dead in the water, if gov stops funding it, it doesn't exist, and on any global market, similarly, it exists as long as it gets heavily subsidized. You can't run an economy on that. The Chinese are winning in other areas because they can actually produce cheaper. This is not the case for semiconductors.

DOA! What is the point of opening a "new" plant offering a 5-year-old production processes for 40% more cost that makes it even more expensive than using TSMC's 4N node?

Prestige and 'look, we can do this ourselves FU' positioning. Its the same backwards imperial thought process as what you're seeing Trump copycat now. And it can actually work for quite a while. Until the empire inevitably falls.

 

[lilhasselhoffer]

That's not how we do things.

We secretly create a deal we benefit from, and then turn around and tell everyone how hard life is and everyone should talk about it a bit more, while in the meantime, most parties get something they want.

We're creating steel the US can't do without. We create machines the US can't do without. At the same time, we depend on them to take our steel and machines. Mutual dependancies Trump thinks he can just waltz right over and erase.

Good luck with that. So far he's achieved nothing, except trust erosion, which ultimately backfires on the US.

The China situation is different. You're looking at a country that has no freedom of speech here. I'm sure they have a fantastic 5nm process. Economically though, its dead in the water, if gov stops funding it, it doesn't exist, and on any global market, similarly, it exists as long as it gets heavily subsidized. You can't run an economy on that. The Chinese are winning in other areas because they can actually produce cheaper. This is not the case for semiconductors.


Prestige and 'look, we can do this ourselves FU' positioning. Its the same backwards imperial thought process as what you're seeing Trump copycat now. And it can actually work for quite a while. Until the empire inevitably falls.

I find it funny that people in Europe seem to think that Trump has done absolutely nothing. I find it funny because those same people a decade and change ago believed that a black man, merely by existing, rewrote the political discourse of North America. Yes, Obama existed. Thing is, the Panama canal is now in the hands of people who will benefit from equal access to it. Mexico and the US have had a rocky relationship via the cartels, yet even Vox has to admit they are an issue (Vox article on Fentanyl). Canada, despite having nearly as bad of an opiod issue, is unwilling to play ball given that their policies do not match the US (Canadian safer supply policy), so anything short of threatening trade is an exercise in asking nicely to try and engage with a problem that Canada is not addressing because they believe it's not a problem in the same way the US has it.


Knowing that the politics is a diversion from the rest of this, let's focus on the actual OP topic. China rolls out a new 5nm process using something that isn't EUV. Cool. On paper, sounds great. That is, until you know that the yields are garbage, and despite the hugely cheaper labor costs you are still working at 40% higher costs. That scream to me that how they did the math is...potentially damning. If the yields are 1/3, and the cost is 40% higher, you have a 67% loss and a 40% price increase. Taken separate, it's 40% increase in cost per unit. Taken together, it's 3.0*1.4 = 420% = a 320% increase in net price per unit of silicon. It's relatively easy to see this being the case with multiple passes of DUV, a practice that the west does not do because of the degraded yields...but it has the benefits of not requiring EUV.

Mix that with a political fluff piece on new technologies that are not viable, and you have an excellent little article that seems like China is amazing, while mathematically demonstrating that they are dying without the ability to steal technology. That's...a lot less rosy of a picture than the CCP would like to share...but if you mask it is East vs. West, and a century of shame rhetoric, it goes down much smoother.



The west, and by that I mean anyone who chose protected capitalism like Taiwan, instead respects laws. The US develops technology. It farms out production of said tech to the Dutch. The Dutch pay for access to the technology, and create machines. Machines are sold to manufacturers. Manufacturers produce goods...often based on patented designs also from the US. The money that was used to research the technology is respected by the Dutch, so the US and Netherlands both walk out of the deal better off. They respect each other's patents, which are legal monopolies, so that everyone gets to profit. Since both countries respect each other's laws, there's no issue.
You then get China. They break exclusivity contracts. They steal technology. They replicate things without understanding them, then use their advantages to compete on the world stage by simply undercutting everyone on price...including their own countrymen by producing even worse versions of everything. I...respect only that China is uniquely capable of driving out everything that costs anything from a process....often at the expense of producing dangerous or otherwise damaging goods. Consider that it was the Chinese who discovered you could fake the protein levels in formula by adding melamine...never mind that pesky kidney issues and death.

So...I believe China has a 5 nm process. I believe that it's so wasteful that it'll never produce commercially viable products. I believe most of China's failures are exactly because of this...they put perceived value well in advance of materials value and durability. I have heard jokes that US cars suck, because they produce so few horsepower per engine displacement. I have also seen them start at -40 (F and C agree at this point), up to 140 F. I've watched a eurotrash automobile that absolutely curb stomps the US version's horsepower be unable to take heavy rain...something that I qualify as rain so thick that you cannot see more than 200' ahead of you on the highway...and the high powered little eurobox basically couldn't take the downpour. I have also watched Chinese electric vehicles with dashboard size monitors and screens, that the teen crowd adore, basically decide to crap out because it was snowing. I've watched the same little Chinese vehicles basically disappear into a cloud of powdered iron oxide because after 3 years without galvanization and proper rust protection they are simply rusted from the core out...while a crapbox blazer from 1998 lasted into 2021 before the thing was totaled. Said crapbox ran between -40 to 120 degrees, rain, snow, sleet, and it protected the idiot who destroyed it by absorbing a 45 mph impact into a tree. Something that I wouldn't wish on my enemies in a new Chinese EV....because it'd be like wishing them dead. Sometimes, running the cost out of everything by building without cost and by stealing technology isn't the way to do it...but that's not how the CCP rolls.

 

[Vayra86]

I find it funny that people in Europe seem to think that Trump has done absolutely nothing. I find it funny because those same people a decade and change ago believed that a black man, merely by existing, rewrote the political discourse of North America. Yes, Obama existed. Thing is, the Panama canal is now in the hands of people who will benefit from equal access to it. Mexico and the US have had a rocky relationship via the cartels, yet even Vox has to admit they are an issue (Vox article on Fentanyl). Canada, despite having nearly as bad of an opiod issue, is unwilling to play ball given that their policies do not match the US (Canadian safer supply policy), so anything short of threatening trade is an exercise in asking nicely to try and engage with a problem that Canada is not addressing because they believe it's not a problem in the same way the US has it.


Knowing that the politics is a diversion from the rest of this, let's focus on the actual OP topic. China rolls out a new 5nm process using something that isn't EUV. Cool. On paper, sounds great. That is, until you know that the yields are garbage, and despite the hugely cheaper labor costs you are still working at 40% higher costs. That scream to me that how they did the math is...potentially damning. If the yields are 1/3, and the cost is 40% higher, you have a 67% loss and a 40% price increase. Taken separate, it's 40% increase in cost per unit. Taken together, it's 3.0*1.4 = 420% = a 320% increase in net price per unit of silicon. It's relatively easy to see this being the case with multiple passes of DUV, a practice that the west does not do because of the degraded yields...but it has the benefits of not requiring EUV.

Mix that with a political fluff piece on new technologies that are not viable, and you have an excellent little article that seems like China is amazing, while mathematically demonstrating that they are dying without the ability to steal technology. That's...a lot less rosy of a picture than the CCP would like to share...but if you mask it is East vs. West, and a century of shame rhetoric, it goes down much smoother.



The west, and by that I mean anyone who chose protected capitalism like Taiwan, instead respects laws. The US develops technology. It farms out production of said tech to the Dutch. The Dutch pay for access to the technology, and create machines. Machines are sold to manufacturers. Manufacturers produce goods...often based on patented designs also from the US. The money that was used to research the technology is respected by the Dutch, so the US and Netherlands both walk out of the deal better off. They respect each other's patents, which are legal monopolies, so that everyone gets to profit. Since both countries respect each other's laws, there's no issue.
You then get China. They break exclusivity contracts. They steal technology. They replicate things without understanding them, then use their advantages to compete on the world stage by simply undercutting everyone on price...including their own countrymen by producing even worse versions of everything. I...respect only that China is uniquely capable of driving out everything that costs anything from a process....often at the expense of producing dangerous or otherwise damaging goods. Consider that it was the Chinese who discovered you could fake the protein levels in formula by adding melamine...never mind that pesky kidney issues and death.

So...I believe China has a 5 nm process. I believe that it's so wasteful that it'll never produce commercially viable products. I believe most of China's failures are exactly because of this...they put perceived value well in advance of materials value and durability. I have heard jokes that US cars suck, because they produce so few horsepower per engine displacement. I have also seen them start at -40 (F and C agree at this point), up to 140 F. I've watched a eurotrash automobile that absolutely curb stomps the US version's horsepower be unable to take heavy rain...something that I qualify as rain so thick that you cannot see more than 200' ahead of you on the highway...and the high powered little eurobox basically couldn't take the downpour. I have also watched Chinese electric vehicles with dashboard size monitors and screens, that the teen crowd adore, basically decide to crap out because it was snowing. I've watched the same little Chinese vehicles basically disappear into a cloud of powdered iron oxide because after 3 years without galvanization and proper rust protection they are simply rusted from the core out...while a crapbox blazer from 1998 lasted into 2021 before the thing was totaled. Said crapbox ran between -40 to 120 degrees, rain, snow, sleet, and it protected the idiot who destroyed it by absorbing a 45 mph impact into a tree. Something that I wouldn't wish on my enemies in a new Chinese EV....because it'd be like wishing them dead. Sometimes, running the cost out of everything by building without cost and by stealing technology isn't the way to do it...but that's not how the CCP rolls.

Do you think the Fentanyl issue is a supply issue!? Goes to show the power of the discourse across the ocean I guess, despite cold hard facts. Every single fact speaks against the idea that somehow the supply created the problem and the War on Drugs was tried before and has failed miserably, just like this one will... and just like the alcohol prohibition act of way back. If you want to fix a drug issue, improve standards of living so people don't have to use them. The current approach is not only ineffective and rampant stupidity, it completely misses the mark and its just a strongarm deal that makes no sense, much like the whole Project 2025, including tariffs, the fairy tale this is somehow going to get shitty factory line jobs back in the US that people are happily going to leave their high-wage desk for, and everything else that is supposed to upset the status quo. Its a lost case of trying to get back a world that existed 50 or 100 years ago. There is only one possible and very simple conclusion to draw on all this extremist right wing resurgence bullshit: we're seeing the tyranny of stupidity here, and that is all it is. It all, only, and exclusively serves to hide the lack of a good answer, but in the real world it really just looks like kids in tamper tantrum flailing their arms about wildly. Childish, pointless, and simply annoying. There is no need whatsoever to get lost in the silly details (or put differently, the daily social media barrage, driven by X) because all they are is misdirection from utter failure and trying to hide far worse issues. I think you can identify that too, or at least, I really hope you can.

It would serve all politicians well to start telling also the inconvenient truth, including the fact some issues are perhaps not entirely fixable, or take a long term investment. In a way this makes the above remarkably on topic. China's deep into a similar alternate reality that they hope materializes as long as they try hard enough and scream loud enough.

On the subject of China's inner workings... we agree entirely - something's gonna give. A fact that applies to everything that is based on bullshit.

 

[lilhasselhoffer]

Do you think the Fentanyl issue is a supply issue!? Goes to show the power of the discourse across the ocean I guess, despite cold hard facts. Every single fact speaks against the idea that somehow the supply created the problem and the War on Drugs was tried before and has failed miserably, just like this one will... and just like the alcohol prohibition act of way back. If you want to fix a drug issue, improve standards of living so people don't have to use them. The current approach is not only ineffective and rampant stupidity, it completely misses the mark and its just a strongarm deal that makes no sense, much like the whole Project 2025, including tariffs, the fairy tale this is somehow going to get shitty factory line jobs back in the US that people are happily going to leave their high-wage desk for, and everything else that is supposed to upset the status quo. Its a lost case of trying to get back a world that existed 50 or 100 years ago. There is only one possible and very simple conclusion to draw on all this extremist right wing resurgence bullshit: we're seeing the tyranny of stupidity here, and that is all it is. It all, only, and exclusively serves to hide the lack of a good answer, but in the real world it really just looks like kids in tamper tantrum flailing their arms about wildly. Childish, pointless, and simply annoying. There is no need whatsoever to get lost in the silly details (or put differently, the daily social media barrage, driven by X) because all they are is misdirection from utter failure and trying to hide far worse issues. I think you can identify that too, or at least, I really hope you can.

It would serve all politicians well to start telling also the inconvenient truth, including the fact some issues are perhaps not entirely fixable, or take a long term investment. In a way this makes the above remarkably on topic. China's deep into a similar alternate reality that they hope materializes as long as they try hard enough and scream loud enough.

On the subject of China's inner workings... we agree entirely - something's gonna give. A fact that applies to everything that is based on bullshit.

I believe that the opiod crisis stems from a complicated web of cheap and "non-addictive" prescriptions, which have led to people becoming hooked. The monsters responsible for that were slapped on the wrist, and since then the demand has generated a supply chain...that political shenanigans have enforced. I believe removing the supply chain will not magically make this disappear, but that it'll become something which people will not be able to become addicted to as easily...and that by slowing the amount of new addicts we can start addressing the issue. Stop the bleeding, then look at sewing up the wound. It's not something that will be solved in a day, but if people see opioids as an easy and low barrier to entry solution that we will never start solving the problem.

All of this is beside the final point. It's an industry that China is using in their political games. If you understand anything about the history between opium, the west, and China you'd see that this is....something they may secretly be enjoying. The Opium wars was Great Britain being immensely crappy to China, and for those who cannot forgive history it has to be interesting to see the people "who wronged you" being wronged in the same ways. This is why they also "have 5nm processes." If they can fake it, even in a losing process, then they can theoretically outlast the west until they can steal it. Ideally, they might even make it rather than steal it...but that's not necessary. Just as long as they can extend their power, and have the west pretending that the rhetoric about being at war with them is "a joke," progress can be made.

 

[Vayra86]

I believe that the opiod crisis stems from a complicated web of cheap and "non-addictive" prescriptions, which have led to people becoming hooked. The monsters responsible for that were slapped on the wrist, and since then the demand has generated a supply chain...that political shenanigans have enforced. I believe removing the supply chain will not magically make this disappear, but that it'll become something which people will not be able to become addicted to as easily...and that by slowing the amount of new addicts we can start addressing the issue. Stop the bleeding, then look at sewing up the wound. It's not something that will be solved in a day, but if people see opioids as an easy and low barrier to entry solution that we will never start solving the problem.

All of this is beside the final point. It's an industry that China is using in their political games. If you understand anything about the history between opium, the west, and China you'd see that this is....something they may secretly be enjoying. The Opium wars was Great Britain being immensely crappy to China, and for those who cannot forgive history it has to be interesting to see the people "who wronged you" being wronged in the same ways. This is why they also "have 5nm processes." If they can fake it, even in a losing process, then they can theoretically outlast the west until they can steal it. Ideally, they might even make it rather than steal it...but that's not necessary. Just as long as they can extend their power, and have the west pretending that the rhetoric about being at war with them is "a joke," progress can be made.

Yeah I think you're right about that in the practical sense. At its very core though I think its a demand and not a supply issue. Part of that demand is indeed the misleading prescription. The other part of it, is deeper, and kind of speaks of a society that wants a pill to make the bad go away. We see a similar thing with the recent hype around weight loss meds with 'magical effects'. People want an easy fix for what is essentially a lifestyle and society issue. But like you say... that's a really long term thing, and a much harder story. The real question though is what will replace Fentanyl in the near future - or what has already replaced it today, and it presses even harder on the core of the issue. Battling symptoms won't fix anything - you stopped the bleeding out the nose, and it'll run out of your ass instead. Its for that reason a lot of countries are instead moving not to more repression on all sorts of drugs, but rather more freedoms, better education, and checks and balances. And that kind of leans into the area where people also manage to achieve permanent weight loss without meds, but just good coaching and perserverance: it takes effort and self motivation to truly get people to change. Neither of which can be had from a pill.

Back to the topic of 5nm, I think you're also right about that indeed. Its a political instrument more than anything else.