The US-China tech conflict has extended to RISC-V chips. Reuters reported on April 24th that the US Department of Commerce, in a letter dated around April 15th to members of Congress, highlighted concerns regarding China’s involvement in open-source RISC-V chip technology.

The Department of Commerce is reportedly assessing the potential national security risks associated with this and evaluating whether appropriate actions within its authority can effectively address any concerns.

According to the same report, the US Department of Commerce has emphasized in its letter the need for caution to avoid harming US companies participating in international organizations related to RISC-V technology. Previously, measures shifting control of 5G technology to China have posed obstacles for US companies in international standard-setting bodies (where China is also involved), thereby threatening America’s leadership position in the field.

RISC-V is an open-source architecture independent of the ARM architecture controlled by the UK-based semiconductor design company Arm, as well as the x86 architecture developed by the US chip giant Intel. RISC-V is utilized in various products, including smartphone chips and advanced processors for AI, making it a crucial component in the industry.

In an effort to break through US technology restrictions, China is reportedly placing significant emphasis on RISC-V technology. This has turned RISC-V into a new battleground in the US-China technology conflict.

As early as October 2023, Chairman Michael McCaul of the House Foreign Affairs Committee pointed out that China is abusing RISC-V to circumvent America’s dominant position in intellectual property required for chip design. McCaul cautioned against supporting China’s technology transfer strategy, as it would weaken US export control laws.

Regarding China’s promotion of RISC-V technology, Republican Senator Marco Rubio has warned that if the US does not expand export controls to address this threat, China could one day surpass the US and become the global leader in chip design.

Rubio’s statement underscores concerns within the US government about the strategic implications of China’s efforts to advance its semiconductor capabilities using technologies like RISC-V. The potential for China to gain a competitive edge in this critical sector is viewed as a significant national security issue by some US policymakers.

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Recently, according to sources from an official platform of Shanghai Construction No.4 (Group), Huahong Group has topped out the main building of FAB9 of the Huahong Manufacturing (Wuxi) project. This is reportedly the second phase project with a total construction area of about 530,000㎡, which is projected to construct a 12-inch characteristic process production line with a monthly capacity of 83,000 wafers.

It can be seen that the 12-inch wafer field is greeted by high enthusiasm. Previously, companies such as Renesas Electronics, PSMC, TSMC, and UMC have all announced plans to build new 12-inch fabs. As for China, as per earlier industry reports, 12-inch fabs scheduled to start production in 2024 include CR Micro, ZenSemi, and CanSemi, all located in Guangdong Province.

• Investment Enthusiasm in 12-Inch Fabs Unabated

On April 11, Renesas officially restarted its previously closed factory in Kofu. It was announced in 2022 that Renesas would invest JPY 90 billion to convert the plant into a 12-inch fab in a bid to meet the increasing demand in the power semiconductor sector.

The fab has a cleanroom with an area of 18,000㎡, and it will start mass production of IGBTs, power MOSFETs, and other power devices in 2025, which is expected to double Renesas’ overall power semiconductor capacity.

On March 13, PSMC and India-based Tata Group held a groundbreaking ceremony for their joint 12-inch fab. The fab comes with a total investment of INR 910 billion (Around USD 11 billion), which is estimated to produce a monthly capacity of 50,000 wafers, covering various mature nodes such as 28nm, 40nm, 55nm, 90nm, and 110nm.

On February 24, TSMC’s Japan Kumamoto fab (JASM) was officially opened, marking TSMC’s first plant (Fab23) in Japan. TrendForce stated that the plant will possess a total capacity of up to 40~50Kwpm in the future, with the process mainly focusing on 22/28nm and a small amount of 12/16nm. This will pave the way for developing the main process of the Kumamoto Fab2 later.

Previously, TSMC had announced that in response to customer demand growth, construction of JASM’s second fab in Japan is planned to commence at the end of 2024 and start operation in late 2027. Media reports stated that TSMC would invest JPY 2 trillion in the second fab in Kumamoto, which will adopt advanced processes of 6nm and 7nm. The monthly total capacity of 12-inch wafers in JASM Kumamoto fab is expected to exceed 100,000 pieces in the future.

In January, it was reported that UMC’s new fab in Singapore is scheduled to complete construction by mid-2024 and start mass production in early 2025. UMC said that to meet the demand for capacity construction, its board of directors approved a capital budget execution proposal of USD 39.8 million. The first phase of the new fab, with a total investment of USD 5 billion, is expected to deliver a monthly capacity of 30,000 wafers, providing 22/28nm processes.

UMC has been operating the 12-inch fab in Singapore for over 20 years. In February 2022, UMC’s board of directors approved the plan to expand a new advanced fab in the Fab12i area in Singapore. At that time, UMC expected the new fab to start mass production in late 2024, but the latest news indicates that the date of mass production will be in early 2025.

• Several Guangdong-Based 12-Inch Fabs Set to Start Production in 2024

According to a local official report from Zengcheng, Guangdong, ZenSemi held a lithography machine introduction ceremony for the project of 12-inch advanced intelligent sensors and characteristic process wafers mass production lines, marking that the project has smoothly entered the debugging and production preparation phase.

It is reported that the first phase of the project covers an area of 370 acres, with a planned investment of CNY 37 billion. It is expected to start production in June 2024, with the first batch of high-yield products scheduled to be completed in late December and delivered to customers.

According to official information from CanSemi, the third phase of CanSemi’s project will establish a 12-inch integrated circuit analog characteristic process production line with a capacity of 40,000 wafers per month. Currently, the first and second phases have been put into production successively, and the company are accelerating the construction of the third phase project, striving to achieve a fixed asset investment of over CNY 4 billion in 2024 and ensure the third phase to complete construction and start production in 2024.

According to the Wechat Account “Binhai Baoan”, Huahong’ 12-inch characteristic process integrated circuit production line project is also expected to start production this year.

It is reported that the first phase of Huahong’ 12-inch power chip production line project has a total investment of CNY  22 billion, with a total construction area of 238,000㎡, and an annual production capacity of 480,000 wafers after completion. The products will mainly be used in automotive electronics, new energy, industrial control, consumer electronics, and other fields.

As per stats from Wechat Account “Global Semiconductor Observation”, there are currently 31 operating 12-inch fabs in China (Inclusive of under-construction 12-inch fixed-capacity fabs), with a total monthly capacity of approximately 1.189 million wafers.

Compared with the planned monthly capacity of 2.17 million wafers, the capacity utilization rate of these fabs is close to 54.48%, indicating significant expansion potential. Considering construction and future planning, it is estimated that China will add 24 new 12-inch fabs in the next five years, with a planned monthly capacity of 2.223 million wafers.

Assuming all planned 12-inch foundries achieve full production, the total monthly capacity of 12-inch wafers in China will exceed 4.14 million wafers in late 2026, representing a 248.19% increase in capacity utilization compared to the present.

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U.S. Commerce Secretary Gina Raimondo recently stated that chips used by the Chinese company Huawei in their earlier Mate 60 Pro smartphone are not as advanced as those produced in the United States.

According to a report from Reuters, Huawei has been under trade restrictions since 2019, surprised the global industry and the U.S. government in August 2023 by unveiling a new smartphone featuring advanced chips. Despite Washington’s ongoing efforts to weaken China’s capabilities in advanced semiconductor research and production, the Huawei Mate 60 Pro is still regarded as a symbol of technological breakthrough in China.

Following the release of the chips used in the Mate 60 Pro, many believed that Gina Raimondo’s efforts to restrict Chinese semiconductors were futile. However, Gina Raimondo recently refuted this viewpoint. She pointed out that the new chips introduced by Huawei are not as capable and lag behind U.S. chips by several years in performance, indicating that U.S. export controls on China are effective.

The same report indicates that Washington has been striving for years to weaken China’s capabilities in advanced chip production and the manufacture of equipment required for these chips. The concern is that these chips could be used to enhance China’s military capabilities, with Huawei being a key player.

Therefore, after Huawei was placed on the U.S. government’s Entity List for export control in 2019, related U.S. suppliers struggled to obtain licenses to ship goods to Huawei. Notably, the sources cited in the report cited by Reuters on March 12th once stated that Intel’s competitor, AMD, had applied for a similar license to sell comparable chips in early 2021 but did not receive approval from the US Department of Commerce.

Nevertheless, Intel has been granted licenses worth billions of dollars to continue selling products to Huawei. Additionally, Huawei has also launched its first artificial intelligence notebook featuring Intel chips this month, leading to further controversies. Moreover, as per reports from The Register, Intel is reportedly preparing to follow in NVIDIA’s footsteps by developing “special edition” versions of its AI acceleration chips, Gaudi 3, for the Chinese market.

When asked if the White House’s stance on business with China is tough enough, Gina Raimondo emphasized the need for accountability from companies and everyone alike. She acknowledged that it wasn’t popular with suppliers when she told them they couldn’t sell semiconductor products to China, but ultimately she made that decision.

The emergence of the new generation of Huawei smartphones has also prompted the US administration to conduct dismantling reviews and gain insights into the technology details behind the chips, which are the most advanced semiconductors produced by China to date. However, few details about the related review have been disclosed.

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According to a report by the South China Morning Post on April 18th, encouraged by official support and continuous industry investment in expansion, China’s total chip production in the first quarter of 2024 reportedly surged by 40% to reach 98.1 billion units. This further highlights China’s shift towards ramping up mature processes in semiconductor development, especially amidst the export restrictions. Additionally, chip production capacity is rapidly expanding.

Recent data released by China’s National Bureau of Statistics shows that chip production grew by 28.4% in March alone, reaching a record high of 36.2 billion units.

Reportedly, the substantial growth in chip production in China is partly attributed to strong demand from downstream industries such as new energy vehicles. Data shows that in the full year of 2023, China’s production of new energy vehicles reached 9.587 million units, a year-on-year increase of 35.8%. In the first quarter of this year, the production of new energy vehicles increased by 29.2% to 2.08 million units. Additionally, in the first quarter of this year, China’s smartphone production increased by 16.7%.

In recent years, with semiconductor plants emerging across various regions, China’s chip production capacity has been continuously expanding. The chip production volume in the first three months of this year is nearly double that of the same period in 2019.

The International Semiconductor Industry Association (SEMI) released a global fab forecast report at the end of last year, indicating that China’s share of global semiconductor capacity will continue to expand, attributed to local government funding injections and other incentive measures. Chinese chip manufacturers may add 18 new fabs in 2024, with wafer annual capacity rising from 7.6 million units in 2023 to 8.6 million units this year.

A report from the American think tank, the Center for Strategic and International Studies (CSIS), also noted that due to U.S. restrictions on advanced chip technology and equipment to China, new investment projects in China’s semiconductor production are focusing on mature process chips.

Data from TrendForce indicates that China’s fabs hits 77, mainly targeting on the mature process.

Researchers cited in the report suggest that the unintended consequence of U.S. export controls on advanced chip technology to China may result in a wave of state-supported investments, leading to overproduction and potentially allowing China to dominate global traditional chip production.

The same reports also indicate that despite China’s strong push for chip self-sufficiency, the country still heavily relies on chip imports. Data from the General Administration of Customs of China shows that in the first quarter of this year, chip imports to China increased by 12.7% year-on-year, reaching 121.5 billion units, while chip exports grew modestly by 3% to 62.4 billion units. Chips remained China’s largest imported commodity in 2023, surpassing crude oil.

However, it’s important to note that a significant portion of the chips imported into China are designed by Chinese chip design firms but manufactured by overseas foundries.

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According to a report from WeChat account “Chip_Inside,” Allen Wu (Wu Xiong’ang), the former CEO of Arm China, has returned to the chip industry and set his sights on the “archrival” of his former employer’s technology – RISC-V. Sources familiar with the matter indicated that many former Arm employees have joined his new company.

Industry sources cited in the same report revealed that a company named “Zhongzhi Chip (Shanghai) Technology Co., Ltd.” is actively recruiting RISC-V professionals, and it is being spearheaded behind the scenes by Wu.

Related information indicates, founded on September 11, 2023, the company is a technology innovation company focusing on RISC-V processor IP and computing platform solutions. With a global team led by world-class chip experts, the company possesses top-tier IP technology development and commercialization experiences.

The industry media has not yet obtained accurate information about whether this new company is planning for independent research and development or acting as the Chinese agent for Tenstorrent, the company where Jim Keller serves as CEO. However, given the recruitment information released by the company, the latter situation is more likely to happen, despite no confirmation.

Said to be backed by abundant resources and shareholders with strong competence, the company has partnered with several stellar global RISC-V chip companies in technology, and works closely with numerous domestic industry leaders, which enable it to rapidly achieve scale growth in revenue and market cap.

The company insists on being a neutral IP company to empower the development of domestic technology applications and will make unremitting efforts to become an international benchmark in the processor IP industry.

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