As a mage, I just want to pursue the truth

Chapter 97 Pessimism and Optimism (First Order Request!)

Young was so excited that he couldn't stop talking. He wanted to talk to Cheng Gang about his understanding of semiconductors and the development of domestic semiconductor alternatives:
"Let's get back to our topic. What are the challenges of 14 nm lithography machines?"

"Let's talk about FinFET first. FinFET is a 3D MOSFET device structure first proposed by Professor Zhengming Hu, a famous professor at the University of California, Berkeley."

"3D MOSFET achieves performance that exceeds that of previous generation planar transistors through its three-dimensional structure. Intel was the first to commercialize it in 11. But after the 14 nm process, FinFET is no longer as reliable as before."

"First, there is the quantum effect that cannot be avoided. It is difficult to increase the current of transistors. In fact, for some materials, the current will become lower. For chips, current means speed."

“Then there is leakage current, which directly affects power consumption. At such a small node, it is also difficult to control leakage in FinFET.”

"Finally, there is cost. According to Moore's Law, as the node decreases, the cost per transistor should decrease."

"But when it comes to the 14nm process, the complicated lithography process may cause the cost of a single transistor to increase."

“SMIC can handle the 14nm process, but why is the stock price still not rising?”

"It is because the 14nm process is too difficult, SMIC's yield rate is not high enough, and it is considered half-finished."

Cheng Gang nodded and said, "No wonder SMIC no longer discloses the revenue share of 14nm and 28nm processes separately, but instead continues to expand 28nm production."

Young is very satisfied with Cheng Gang's acumen: "Even in the two years after the announcement of mass production of the 14nm process, SMIC still counted the revenue of 14nm and 28nm together, and now it does not even disclose the revenue share."

（扒了中芯国际从2020年和2021年的财报，其营收最大来源是55/65nm制程，而14/28nm营收占比2020年一季度是7.8%，到了2021年一季度占比不增反降变成了6.9%）

Note: This only means that SMIC's 14nm is not as good as expected, not that SMIC has not developed the 14nm process.

Young continued: "The difficulty of chip foundry is lower than that of lithography machine."

"SMIC's 14nm process is so difficult, and the 14nm lithography machine will only be more difficult."

"The foundry process will encounter fatal problems, and the lithography machine will not be able to escape either."

"One chip requires hundreds of masks and photolithography to complete the manufacturing process."

“So lithography is the most important part.”

"So a very obvious problem arises: how to ensure that so many lithography steps can be engraved in the same position on the silicon wafer."

"At 14nm process, the line width is only a few nanometers."

"If there is a slight mistake, even if there is a slight deviation between the two masks, the entire chip will be scrapped."

"The lithography machine needs to conquer hundreds of mask nanometer-level positions, and the time it takes is far less optimistic than the outside world imagines."

"Even if domestic lithography machines are produced, it will take time to improve the yield rate."

"Now the lithography machine must guarantee a production rate of 125 wafers per hour. Otherwise, semiconductor manufacturers will lose money."

"There are so many lessons we need to learn here," Young said with a distressed tone.

Although Young often uses an English name, he is indeed a Chinese and an undergraduate student at Shenhai Jiaotong University.

Cheng Gang sighed: "We can only take it one step at a time. For now, we only need the 28nm process, which should be able to meet our needs."

"Since SMIC can produce 14nm, it doesn't matter if the price is a little higher."

Young also lamented: "There are too many things to catch up in the semiconductor field, and it will not be caught up in a short time."

"It is not at all like what the media has portrayed, that buying a lithography machine can solve production problems. It also takes time to debug the lithography machine with masks and train skilled workers."

Cheng Gang is more optimistic than Young: "I think the route we are taking is right, relying on China's vast market to cultivate a complete semiconductor industry chain." "Of course there are many difficulties, but we can only overcome them one by one."

Young: "You are more optimistic than me. We haven't even got the 28nm lithography machine yet, while Europe's 3nm process is just around the corner, not to mention that they have already planned the technology route from 3nm to 1nm."

“The gap is a bit big.”

Young had something else in his mind that he hadn't said aloud. With such a huge gap, if he wanted to overtake, he would have to open up a new track and use a completely new technical route.

Otherwise, in the current silicon-based semiconductor industry, Young sees no hope of overtaking others.

Cheng Gang consoled him: "I had similar feelings when I was in the financial industry. There were many areas where we lagged behind foreign countries, and it seemed like there was no chance for us to catch up."

"Because risk control is a compulsory course for those working in the financial industry, we always see the risks first and think about how to control them."

“After I left the financial sector and entered the industry, I spent more time thinking about what I want to do and how I can achieve my goals.”

“The financial and industrial sectors look at issues from completely different perspectives.”

"Of course I can't judge which angle is right, I can only say that I think domestic semiconductors still have a good development prospect and future."

"As for Kechuang Bio's brain-computer connection chip, even if it is made with a 14nm process, foreign manufacturers use more advanced chips. We are confident that we can optimize the 14nm brain-computer connection chip to be better than the foreign 7nm one."

Young nodded: "I have confidence in Kechuang Biotechnology for brain-computer connection, but what about AI chips?"

"Computing power is critical to AI chips. How can we make up for the poor computing power?"

Cheng Gang was shocked: "How did you know we want to make AI chips?"

Young stood up and walked around: "Don't be so surprised, there are no secrets in the investment circle. The so-called secrets are just a matter of time before they are revealed."

"When you went to Tencent to ask about SecondMind, we guessed that Sinovation Biotech was going to invest in AI chips and even enter the AI ​​chip industry itself."

"And your company's vice president recently led a team to England, bringing with him a group of people including legal, translator, business, and financial technicians. Isn't it obvious that they were going there to discuss acquisitions?"

"These are not secrets. You have been in the investment circle before, so you should know how quickly news from top investment institutions spreads."

Shunwei Capital is not a top player, but it can barely be considered mid-tier.

Cheng Gang calmed down: "You told me so much today, what do you want?"

Young stated his purpose: "IDG and Goldman Sachs can help Sinovation Biotech settle the issue of being included in the Entity List. We need to invest in SecondMind together."

Young's words were consistent with what Cheng Gang expected: "I don't have the authority. This matter needs to be decided by Director Zheng."

"Can you help us get off the unverified list?"

Young shook his head: "For those who have already been included in the list, we can't do that for the time being. We can ensure that Sinovation Biotech will not be promoted from the Unverified List to the Entity List in the near future."

The Unverified List is intended simply to provide additional due diligence for American businesses wishing to do business with listed companies.

The extent here is just hope, so the impact is limited.

The Entity List means that companies on the list are unable to have any business transactions with American, which is far more serious than the unverified list.

Thanks to the book friend 20201222095310546 for the reward! I will update three chapters first, and there are still two chapters to go. It will probably be updated in the afternoon.

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(End of this chapter)