Recently, major U.S. semiconductor equipment WFE (Wafer Fab Equipment) suppliers such as Applied Materials, Lam Research, KLA-Tencor, and Axcelis are expected to obtain permits for the overcoming of SMIC’s 14nm and above processes, spare parts and machines, and other related export applications. TrendForce Consulting believes that this move will help SMIC optimize modules in mature processes and improve production bottlenecks, so that raw materials and spare parts will not be broken in the second half of the year. It is estimated that SMIC’s global market share in 2021 will still be Up to 4.2%. However, although some of the shortage of foundry capacity can be relieved slightly, the global foundry capacity is still difficult to solve, and the United States will continue to restrict the purchase of SMIC machines below 10nm (inclusive), so long-term development still has hidden concerns .
China Semiconductor’s long-term development policy is clear, and SMIC continues to expand domestic demand and localization
SMIC, currently the world’s fifth largest IC Foundry supplier, has more than 70% of its main revenue from mainland China and the Asia-Pacific region; and the proportion of process revenue is led by the contribution of 0.18 um, 55nm and 40nm, totaling more than 80%. Mainly provide customers with service platforms such as Logic, BCD, eFlash, Sensor, RF, HV, etc., and cooperate with Chinese policies such as integrated circuit projects in the 13th and 14th Five-Year National Development Guidelines, and continue to strengthen the WFE localization of equipment and raw materials. Import.
From the perspective of SMIC’s development, under the influence of the US Department of Commerce’s ban on its long-term capacity planning and development strategy, it is estimated that capital expenditures in 2021 will be reduced by 25% annually, and the main investment will be in the mature node (Mature Node). With the expansion of production capacity and the construction of a new joint venture plant in Beijing, the investment in advanced technologies such as fin field-effect transistors (FinFET) is conservatively viewed. On the whole, many uncertain factors will force SMIC to slow down capital expenditures and focus on 55/40nm and 0.18um mature technology as the main development axis.
In terms of revenue share, more than half of SMIC’s revenue comes from China. However, as the short-term competition between Sino-US semiconductors is not easy to alleviate, major international customers can consider the selection of foundries and long-term cooperation. Whether you are willing to place an order with SMIC will be the focus of observation in the future. From the perspective of the return on investment of Technology Scaling and Mature Node, SMIC’s current advanced process development plan is no longer the top priority due to limited customer conditions and restrictions from third-party vendors; on the other hand, layout Chiplet or Specialty IC, which is more conducive to the company’s operations, will concentrate resources on the existing mature processes of 14nm and above, and increase the customer’s process design and development platform (PDK). In addition to creating a long-term profitable business model, it can also maintain a R&D team. The momentum of the future growth of the members and the company.