A deep ultraviolet lithography machine used to make microchips. Photo: Brookings.

The Trump administration is betting the farm that China won’t find a workaround to its semiconductor chip ban.

I don’t know what the odds are, but owing to China’s rapidly expanding R&D and everything else the Middle Kingdom has achieved over the last ten years, I think I’d take him up on that bet.

According to a report in Tom’s Hardware online, Shanghai Micro Electronic Equipment (SMEE) is reportedly on track to deliver its second-gen deep ultraviolet (DUV) lithography scanner by the fourth quarter of 2021.

The tool can produce chips using 28 nm process technologies and relies on components produced in China and Japan, the report said.

And, more importantly, it does not rely on devices made in the US, a major factor in the ongoing Sino-US trade war. 

Mind you, there are a number of competitive producers of semiconductors in China that make chips developed in the country using fabrication technologies designed in Tianxia, the report said.

But all of these companies use production equipment developed and made in other countries, such as Japan, the Netherlands and Trumpland.

For those who are unaware, lithography machines play quite a crucial role in the production of chips as they etch patterns on wafers for placing transistors.

One of the biggest breakthroughs has been EUV that creates extremely thin markings, Gizmo China online reported. However, the discovery is still at the theoretical state and it could take years as well as plenty of money to make this a reality.

Compared to others, China is still behind when it comes to manufacturing chipsets, which is often outsourced to the likes of TSMC (Taiwan Semiconductor Manufacturing Company).

Nonetheless, the discovery of a new process laser lithography by China is a major step forward for the country. 

What exactly does a DUV lithography machine do?

In short, it’s as big as a tractor and it’s a technological marvel.

According to Brookings Tech Stream online, a generator ejects 50,000 tiny droplets of molten tin per second. A high-powered laser blasts each droplet twice. The first shapes the tiny tin, so the second can vaporize it into plasma.

The plasma emits extreme ultraviolet (EUV) radiation that is focused into a beam and bounced through a series of mirrors. The mirrors are so smooth that if expanded to the size of Germany they would not have a bump higher than a millimeter.

Finally, the EUV beam hits a silicon wafer—itself a marvel of materials science — with a precision equivalent to shooting an arrow from Earth to hit an apple placed on the moon, Brookings reported.

This allows the EUV machine to draw transistors into the wafer with features measuring only five nanometers — approximately the length your fingernail grows in five seconds. This wafer with billions or trillions of transistors is eventually made into computer chips.

An EUV machine is made of more than 100,000 parts, costs approximately US$120 million, and is shipped in 40 freight containers, Brookings reported.

There are only several dozen of them on Earth and approximately two years’ worth of back orders for more.

It might seem unintuitive that the demand for a $120 million tool far outstrips supply, but only one company can make them.

It’s a Dutch company called ASML, which nearly exclusively makes lithography machines for chip manufacturing. Despite this hyperspecialization, it has a market capitalization of more than US$150 billion — much higher than IBM’s and only slightly lower than Tesla’s, Brookings reported.

This is what China is up against. Yes, it could take years, but, it’s do-able.

Founded in 2002, SMEE is a highly-integrated developer and manufacturer of semiconductor production equipment (and a provider or support services) that makes a broad range of products that includes scanners and inspection tools, Tom’s Hardware online reported.

Today, SMEE’s most advanced devices are its 600-series scanners that can be used to make chips using 0.28-micron (280 nm), 0.11-micron (110 nm), and 0.09-micron (90 nm) process technologies, the report said.  

The top-of-the-range SMEE SSA600/20 machine is an immersion deep ultraviolet lithography tool that is equipped with a 193-nm argon fluoride (ArF) laser.

Companies like Intel and TSMC started to use immersion DUV lithography back in 2004, so the SSA600/200 can hardly be called a leading-edge piece of equipment, the report said.

The successor of the SSA600/20 machine will continue to use an ArF light source, but for considerably thinner process technologies. That upcoming scanner promises to be advanced enough to make chips using a 28nm process technology, according to Verdict.

TV maker Konka Group last month also disclosed plans to build a US$4.5 billion semiconductor industrial park with the local authorities in Nanchang, eastern Jiangxi province, the report said.

Besides seeing microchips as a powerful weapon in the trade war, the Trump administration fears that China’s growing expertise in chipmaking could eventually challenge one of America’s biggest export industries, MIT Technology Review online reported. 

Microchips are also crucial for things like advanced weapons systems and supercomputers, and the administration is worried that as China’s chip-building prowess grows, so too will its military might.

Clearly, this was destined, it was the fork in the road between China and the US. If anything, Chinese officials should have seen it coming.

But a late start, is better than nothing.