On the evening of May 12, a news report from the Financial Associated Press spread widely, saying that US semiconductor equipment vendors LAM and AMAT sent letters to domestic semiconductor foundries (such as SMIC and H-Grace Semiconductor), requesting the prohibition of the use of its equipment to produce military products, and start the “unlimited traceability” mechanism.
Figure: News from Cailian Press
Afterwards, the CITIC Securities Electronics Group immediately inquired about the listed companies. SMIC and H-Grace Semiconductor stated that they had not received a similar letter. In addition, CITIC Securities also stated that it had confirmed with the source Cailian Press (Science and Technology Board Daily) that the other party said that the relevant description was inaccurate. SMIC and H-Grace Semiconductor had nothing to do with this incident, and did not receive a similar letter, apologizing and confirming. The relevant manuscript will be revised later.
The CITIC Securities Electronics Group said that AMAT and LAM are important equipment suppliers for SMIC and H-Grace Semiconductor. The suppliers have no reason to send letters to downstream customers. The logic of commercial considerations is unreasonable, unless the relevant United States departments benefit from it, and the authenticity needs further confirmation of the source.
As SMIC announced in March, it announced that equipment orders purchased from LAM, AMAT, and Tokyo Electron were US $ 600 million, US $ 540 million, and US $ 550 million, respectively, with large purchase amounts.
It is reported that AMAT and Lam account for about 17% and 13% of the global semiconductor equipment market, respectively. It is the world’s first and fourth largest equipment manufacturer leading in the fields of deposition, etching, ion implantation, CMP, and uniform development, especially advanced process equipment difficult to replace by non-US manufacturers.
However, in general, the CITIC Securities Electronics Group said that the US government has continued to increase restrictions on semiconductors in China in recent months.
According to Reuters reports, on April 27, 2020, the US government said it would impose new restrictions on exports to China, including civilian aircraft parts and semiconductor production equipment.
The new regulations require US companies to sell certain products to Chinese companies that support the military after obtaining a license, even if these products are used in civilian applications. The regulations also abolish the exceptions for certain U.S. technologies and products exported without permission.
In addition, the newly revised “Wassenaar Agreement” revised at the end of 2019 added two more export control contents in the field of semiconductors, mainly involving computing lithography software and 12-inch large silicon wafer manufacturing technology. The “Wassenaar Agreement” itself is used to control related technologies for military applications.
The CITIC Securities Electronics Group stated that an unconfirmed news has spread widely, showing the shadow of the cup and bow after the disappearance of Sino-US mutual trust. Regardless of the authenticity of the news, it will accelerate the localization of semiconductor equipment, materials, and manufacturing.