Despite US Sanctions, China Pushes Forward In Advanced Chip Development, But Challenges Persist: Report
Portfolio Pulse from Benzinga Neuro
China's Semiconductor Manufacturing International Corp (SMIC) has made progress in developing advanced chips despite US sanctions, producing a 7-nanometer chip for Huawei's Mate 60. SMIC is now working on 5-nanometer chips, facing challenges due to reliance on older equipment, leading to higher costs and lower yields compared to Taiwan Semiconductor Manufacturing Co Ltd (TSM). SMIC's advancements come amid US efforts to restrict China's semiconductor progress, including stringent restrictions on chip equipment procurement.
February 12, 2024 | 8:51 am
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NEUTRAL IMPACT
Taiwan Semiconductor Manufacturing Co Ltd (TSM) is mentioned as the world's largest and most advanced contract chip manufacturer, with SMIC's products costing 40% to 50% more than TSM's due to older equipment.
TSM is indirectly impacted by SMIC's advancements and challenges. The comparison highlights TSM's competitive edge in cost and technology, but the direct short-term impact on TSM's stock is neutral as the market has likely already priced in TSM's technological leadership.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 60
POSITIVE IMPACT
ASML Holding NV is critical for SMIC's ability to produce advanced chips cost-effectively, with its extreme ultraviolet (EUV) machine being essential for making the most advanced chips at scale.
ASML's role is crucial in the semiconductor manufacturing industry, especially for companies like SMIC that are trying to advance despite sanctions. The demand for ASML's EUV machines, given their importance in producing advanced chips, could potentially increase, positively impacting ASML's short-term stock performance.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 80