The ongoing trade war between the US and China is multifaceted, affecting or will affect dozens of industries and tens of thousands of companies. Apparently, the confrontation between the two powers could make all computer memory factories in China inefficient compared to facilities outside the country, as the US does not want advanced equipment installed anywhere in China. According to Reuters, this has already affected SK Hynix’s plans for its Wuxi fab.
SK Hynix’s C2 semiconductor plant in Wuxi, China, produces a significant portion of the company’s DRAM output and some NAND memory. In recent years, SK Hynix has expanded its cleanroom space in the fab at least once, but in order to introduce the next generation of DRAM process technologies to the factory, it needs to equip it with extreme ultraviolet (EUV) lithography tools and other leading edge machines. But it looks like the company is going to have some problems with this, Reuters reports.
One of the things the US government is particularly concerned about is China’s access to advanced semiconductor manufacturing technologies, such as extreme ultraviolet lithography instruments. The US government cannot directly prohibit ASML, a Dutch company, from selling its EUV tools to companies in China, but the Trump administration has reportedly succeeded in convincing Dutch authorities to allow the export of ASML’s Twinscan NXE tools. to Semiconductor Manufacturing International Co. (SMIC). with reference to the Wassenaar Arrangement from a few years ago. Apparently the same can now be done with EUV tools for SK Hynix’s C2 fab.
“They’re really caught between a Chinese rock and an American hard spot,” Dan Hutcheson, chief executive officer of VLSIresearch, told the news agency. “Anyone who puts an EUV tool in China gives China the capacity. Once it’s there, you have no idea where it’s going to go next. The Chinese could always grab it or do whatever they wanted to do.”
The next generation DRAM manufacturing technologies from SK Hynix and Samsung Electronics use EUV lithography and without it the Wuxi fab cannot take over the new nodes and produce advanced DRAM products (such as high capacity DDR5 or LPDDR5/LPDDR5X devices ). ). As a result, sooner or later it will become significantly less economically efficient than DRAM production facilities in South Korea and Taiwan, where EUV tools are or will be used. It is not only about SK Hynix, but also about Samsung, which also has DRAM capacity in China. Ultimately, China-based DRAM makers will also not be able to upgrade their fab with EUV tools, which will make them less competitive than their foreign rivals.
As a mid-term solution, SK Hynix can reuse its C2 plant for 3D NAND production, as its flash memory does not currently require EUV lithography. But in the long run, 3D NAND will also move to EUV tools, so the fab will have to be used again. For example, for the production of CMOS image sensors or other chips using mature process technologies.
SK Hynix did not comment on the story. ASML said it adheres to all export control laws, but warned that extensive use of export controls could exacerbate problems in the semiconductor supply chain and the global chip supply.