SMIC to sell Huawei costly, inefficient 5nm chips

Semiconductor Manufacturing International Corp (SMIC), China’s largest chip maker, reportedly will mass produce 5-nanometer chips for Huawei Technologies later this year despite low yields and high production cost.

Commentators said Huawei and SMIC are determined to push forward with this costly project as Beijing wants to show the world that Chinese companies can achieve technological breakthroughs despite the US chip export ban. They said it is more likely a political project than a commercially feasible one.

Chip engineers said it’s technically possible to use immersion deep-ultraviolet (DUV) lithography to produce 5nm chips but the cost can be several times higher than those made with extreme-ultraviolet (EUV) lithography. They said SMIC may be able to make 7nm and 5nm chips with yields of 50% and 30-40%, respectively.

The Financial Times reported on Tuesday that SMIC will use its existing stock of the US-and Dutch-made equipment to mass-produce 5nm Kirin systems-on-chips (SoCs). It said SMIC is pricing its 5nm and 7nm products at a 40-50% premium over what TSMC charges for similar technology nodes.

Citing some experts, the FT said the yield of SMIC’s 7nm chips is less than one-third that of TSMC’s similar products. 

Huawei and SMIC can use still-existing DUV equipment that’s on hand to produce 5nm but the cost will be very high, Burn Lin, a former vice president of Taiwan Semiconductor Manufacturing Co and current dean of the National Tsing Hua University in Taiwan’s Hsinchu, told Bloomberg in an interview last October. 

The production of 5nm chips with a DUV lithography requires four-time patterning technique, which includes multiple exposures and etching processes, he said. The multiple patterning is time-consuming and can result in a low yield if exposures are not done accurately, he said.

His view was that the US should focus on maintaining its chip design leadership, instead of trying to limit China’s progress. He pointed out that Beijing had adopted a “whole-nation” strategy to boost its chip industry.

Chinese President Xi Jinping said in the ceremony of the National Engineer Awards on January 19 that local engineers and technicians should help the country achieve great self-reliance and strength in science and technology by making breakthroughs in core technologies in key fields and developing high-quality projects.

7nm chips

Last August, Huawei surprisingly launched the Kirin 9000s chip in its Mate60 Pro phone. Technology experts later found that the 7nm chip was made by the SMIC with its N+2 process via DUV lithography. 

In December 2023, Huawei unveiled the Qingyun L540 laptop that uses a Kirin chip called 9006C. Commentators had once speculated that Huawei achieved new technological breakthroughs.

TechInsights, a Canadian technology solution provider, said in early January that the 9006C chips came from the inventory delivered before TSMC was banned by the US from making chips for Huawei in mid-September 2020.

An unnamed industry source told The Elec, a South Korean news website, last December that SMIC is preparing its 5nm process through DUV. He said that the parts supply for the DUV cannot keep up with demand in China, and that the photomask usage is expected to further increase. 

A photomask in a lithography machine is an opaque plate with transparent areas that allow light to shine through in a defined pattern to achieve exposure. 

A technology writer at Wccftech.com, a Vancouver-based news website, said the expected yield of SMIC’s 5nm process using the current DUV hardware will be about 30-40%.

SMIC has never disclosed the yield of its 7nm or smaller chips. Citing some analysts, Reuters estimated that SMIC’s 7nm process has a yield rate below 50%.

In early 2017, TSMC began to produce 7nm memory chips using a process called N7FF+ with EUV lithography. Prior to this, the Taiwanese chip maker used DUV lithography to make 7nm with a yield of 76%.

Media reports said TSMC has already boosted the yield of its 7nm and 5nm chips to 93.5% and 80%, respectively, in 2019. Now TSMC is making 3nm chips with a yield of 55%, competing against Samsung’s 60-70%.

NXT:2000i

Some analysts said SMIC used ASML’s NXT:2000i to produce the Kirin 9000S. 

Citing an unnamed expert in the chip-making industry, Caijing.com reported last November that there were fewer than five ASML systems in China as advanced as NXT:2000i.

ASML said last June that it would have to apply for export licenses from the Dutch government for all shipments of its most advanced immersion DUV lithography systems, the NXT:2000i and subsequent immersion systems.

On January 1 this year, it said the Dutch government has partially revoked its license for the shipment of NXT:2050i and NXT:2100i lithography systems to China from the beginning of this year. 

But it did not say whether its export license for the shipment of NXT:2000i has also been revoked. 

In fact, SMIC can also use the NXT:1980Di, an older generation of immersion DUV lithography, to make 5nm or 7nm chips but the yield will be even lower.

Read: High-end DUV ban: China’s damage coming into focus

Follow Jeff Pao on Twitter at @jeffpao3