China has reached a significant milestone by acquiring competency in 28 nanometers (nm) and 14nm chip manufacturing

This chip production breakthrough comes at a time of particular importance as the world grapples with unprecedented chip shortage. The outbreak of the COVID-19 pandemic last year led to a surge in demand for electronics and mobile devices as people moved to work from home to maintain social distancing. The chip shortage has now halted production in several industries. 
Chips are easily the lifeblood of our lives, with everything from laptops to cars to washing machines using chips. Further, several upcoming technologies like Artificial Intelligence, 5G, Augmented Reality, and Virtual Reality will add to the demand for chips. Being the world’s manufacturing hub, it is not surprising that China was the worst affected by the chip shortage. The US sanctions further added to the challenge for the country. 
China: Chipping Away 
Chip manufacturing is a highly complex process demanding skills and expertise developed over several years. This is especially true in producing smaller chips like 28nm and 14nm chips. 
Being the world’s manufacturing hub, it is not surprising that China is the biggest consumer of chips. It is aggressively working towards developing competencies in chip manufacturing, especially so now that the impact of the chip shortage is being felt.  
Last year, the Chinese Government rolled out several policies to support the development of the Integrated Chip sector, including offering financial support, tax incentives, and research facilities. The developments led to an increase in the production of semiconductors by 16.2% in 2020, up from just 7.2% in 2019, according to a recent report from Analysys Mason. 
The recent development of producing 28nm and 14nm chips is especially relevant as the 28nm technology brings improved benefits compared with 40nm. It helps deliver better speeds by as much as 50%, with the energy consumption potentially reduced by 50% per switch. Considering these cost and technical factors, the 28nm process promises to become the mid-range mainstream process node for the next few years. The manufacturing of 28nm chips shows that China now has the capabilities to carry out advanced chip-making processes. 
The 28nm Chip Story 
China is all set to become self-sufficient in the production of 28nm chips this year. The process is likely to mature this year in line with the growing demand for these chips. 
“Once the domestic production of 28nm is realised in China, many downstream application industries will be able to become self-reliant in chips. This will also be able to meet the needs of most electronic products beyond mobiles. It will be a very good opportunity for local companies in China along the chip industry chain,” said Dr. Guangnan Ni, an Academician of the Chinese Academy of Engineering, in a recent interview with a Chinese media Weiot.
Leading companies like Shanghai Micro Electronics Equipment (Group) Co. Ltd, which has 28nm chip foundry capabilities, announced that it would deliver the first domestic 28nm lithography machine in 2021. 
"We are fully equipped with the capacity of mass production of 28nm technology node and 100% domestic chips,” added Dr. Guangnan Ni. 
The 28nm chips are required for 5G infrastructure, new energy vehicles, UHV and data centres, among other use cases. The cost-effectiveness of the 28nm process should be the highest in terms of power consumption, function, and performance, therefore, 28nm will become the mainstream application in these areas.
According to the State Council’s data in August 2020, China’s chip self-sufficiency rate will reach 70% by 2025. Compare this with the 30% self-sufficiency rate in 2019, and the increase will be an additional 40% over six years. 
Under the current trend, domestic 28nm chips will have great development opportunities. 
“The opportunity lies ahead, but companies must also realise how to do their works to grasp this opportunity – finding deficiencies and correcting them in time, which polish the linkage and cooperation between the 28nm process supply chain and realise the advantages of the domestic 28nm chips fully. Strengthen the production capacity, make it truly independent and controllable, and seize the current market opportunities,” said Dr. Guangnan Ni. 
Upcoming 14nm processes
China is also steadily moving to achieve 100% domestic mass production of 14nm chips in the coming year. According to data released by Semiconductor Manufacturing International Corporation (SMIC), the company started mass production of 14nm process chip in the fourth quarter of 2019. In March this year, the yield rate of its 14nm chips has reached 90–95%, implying that the process has reached an industry-leading level and it is fully capable of responding to the needs of downstream mass production.
The 14nm process promises to become the best choice for downstream users in applications such as mid-to-high-end AP/SoC, data processing, GPU, mining machine ASIC, FPGA, and automotive semiconductors. 
More importantly, it provides the foundation for higher-end chip deposition technology in China and will help the country reach a chip self-sufficiency rate of 70% by 2025.
“Although the current market has given development opportunities to local integrated circuit companies, they must understand that integrated circuit is an industry that requires high collaboration and mutually beneficial development. Therefore, if the companies in the chain work alone, the development of the entire integrated circuit industry cannot rely on a single point for a breakthrough," said Dr. Guangnan Ni. 
"Instead, the efficiency of domestic integrated circuits can only be brought into full play when there is coordination in the ecosystem from every part, for instance, from basic materials, core algorithms, peripheral consumables, chip design, packaging and testing, and downstream applications,” added Dr. Guangnan Ni. 
The mass production of 28nm and 14nm is sure to spur the local industry to innovate and go beyond traditional thinking to achieve a high performing Chinese system. A completely autonomous Chinese system can meet the needs of the country’s infrastructure and critical information infrastructure businesses. Apart from inspiring confidence in the country’s global customers, this will go a long way in enhancing the strength of China’s semiconductor industry chain for further development. 
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