China shrugs off import restrictions, plans 0.18-micron fabs
By Mike Clendenin
EE Times
(08/24/01 16:42 p.m. EST)
SHANGHAI, China — In what would be a major boost for the Chinese semiconductor industry, China's new 200-mm wafer foundries say they expect to use 0.18-micron process technology in 2002 — even though the United States has not yet loosened export rules for tools at that node.
An executive at Semiconductor Manufacturing International Corp. here said the company will start production using 0.18-micron process technology in January, just two months after the fab officially opens. If so, it would be the first fab in China to make the migration.
"We have a solid road map for 0.18 micron," said Jowei Dun, senior director of fab operations at Semiconductor Manufacturing International and a former engineer at Taiwan Semiconductor Manufacturing Co. "Our first product will come out in November on 0.25 and 0.20, but hopefully two months later, if everything goes smoothly, we can start 0.18."
At this point, the most advanced process technology used in China is 0.24 micron; indeed, most production here takes place at 0.35 micron or far above. Hua Hong-NEC, China's first 200-mm wafer fab, has used 0.24-micron technology since last year to produce DRAMs. Motorola's Tianjin plant also has approval to use 0.25-micron technology, but currently it employs a 0.35-micron process.
Hua Hong-NEC and Grace Semiconductor Manufacturing Corp. are adding fuel to the speculation that 0.18 micron will come to China next year. Hua Hong-NEC, a joint venture between the Japanese chip maker and the Chinese government, said it is negotiating for the release of 0.18-micron tools with the Japanese government and is cautiously optimistic it will make the migration next summer.
Grace is also hopeful that it will have made the switch to 0.18 micron by the end of 2002, when it is expected to bring its first 200-mm wafer fab online. "Up to now, from the information I get, it seems like it won't be a problem," said Nasa Tsai, vice chairman of Grace. "When I started at the end of last year, what I heard was that 0.25 was no problem. Now it seems like 0.25 is for sure and 0.18 [export policies are] probably going to be relaxed."
Little evidence
Apart from local wafer manufacturers' road maps and hopes, however, there appears to be little solid evidence that the U.S., Japanese and Dutch governments will ease export controls soon on on tools for 0.18 micron.
The United States and a consortium of about 30 other countries, under an agreement known as the Wassenaar Arrangement, closely regulate the export of products that could be used to enhance the military capabilities of another country. China is one of the countries targeted by the guidelines, with its fabs restricted to technology that lags behind the state of the art by at least one generation.
The Wassenaar Arrangement's guidelines are not binding, so participating countries may still make individual decisions about whether to grant export licenses for sophisticated technology, such as semiconductor manufacturing equipment. Currently, there are no proposals to loosen the Wassenaar guidelines, which require that export licenses be issued for sub-0.30-micron technology. The United States, Japan and the Netherlands usually — but not always — align with each other when issuing such licenses.
The latest exception happened in1997, when the Japanese government granted licenses to tool vendors shipping 0.35-micron technology to Hua Hong-NEC's fab in Shanghai. The United States had disagreed with the decision. It's unknown whether Japan would do so again, opening the way for Nikon Corp., which has a history of selling steppers and other tools in China.
"What has emerged is a system right now where the United States generally takes a harder look at export licenses for products going to China than do the other Wassenaar countries," said Jennifer Connell-Dowling, director of public policy in Washington for Semiconductor Equipment and Materials International (SEMI). The Japanese and U.S. governments do talk to each other about what items should be restricted, she said, "but I don't think it's fair to say that Japan will not ship something just because the United States objects. The United States government was not ready to see Hua Hong-NEC go to 0.35 when it did. It would have preferred to keep the technology at the 0.5 level at that point."
Last year, Japan proposed changes to the Wassenaar rules that would have made it easier to ship 0.18-micron technology to China. In the end, the guidelines were loosened to ease the burden of shipping 0.25-micron tools. Even so, U.S. companies must undergo a lengthy export-licensing process.
In Washington, SEMI is in the early stages of an effort to persuade the Bush administration to relax the rules for 0.18-micron exports. Although China still represents a small percentage of chip equipment companies' sales, "we do feel that the China market, after hovering on the edge for a long time, is really going to be moving forward, and they are going to be moving forward with advanced technology," Connell-Dowling said.
She noted that separate efforts by the House and Senate to draft legislation reauthorizing the Export Administration Act appear to be headed in opposite directions. The Senate bill (S149) is aimed at streamlining the export control process and adding more accountability and transparency to the process. The House version (HR2581) adds provisions that SEMI considers a setback. "It makes it more difficult to export without providing any enhanced national security," Connell-Dowling said. The Senate could vote on its version early next month; the House is not expected to do so until October or November.
A U.S. official this past week said he was unaware of plans to review government export controls on lithography equipment but did not rule our such a review if 0.18-micron equipment became widely available.
Harmful restrictions
Some observers argued that China already has enough advanced technology for defense and that semiconductor equipment restrictions only hinder commercial development. "The difference between 0.25 micron and 0.18 is not that much. The politicians play too much at politics," said Robert Lee, a Taiwanese businessman who is president of Central Semiconductor Manufacturing Corp., which is considered China's first successful foundry. "This country could shoot a ballistic missile more than 10 years ago . . . with accuracy of less than 500 meters.
"Technology limitations will only make the civilians suffer and make the globalization of Chinese society suffer. In terms of military use, you only need to use 3.0 micron, not 0.50 or 0.25 or 0.18 micron. The shrink is mostly to get costs down."
Equipment vendor Nikon declined to comment on the subject of shipping 0.18-micron technology into China's market. "It's a very delicate issue," said an industry source in Japan. "The U.S. [Department of Defense] is very nervous about this level of technology going to China, and the U.S. and Japanese governments have agreed not to export such technology to China.
"However, in the case of a Japanese company's supplying another Japanese company, I suppose there is no prohibition to export such equipment," he said. "NEC, for example, has a plan to build a 0.18-micron fab, and they use Nikon and Canon equipment, especially Nikon. But there are no facts as to whether such equipment will be delivered or not."
A Nikon spokesman said the company has shipped steppers to China, but he would not elaborate. He said Nikon must obtain permission from the Japanese government to ship equipment with a resolution under 50 micrometers or a wavelength light source under 350 nanometers.
Netherlands-based ASM Lithography, also a supplier in the Chinese market, said it would need permission from both the U.S. and Dutch governments before shipping advanced process tools into China. "We do have one foundry customer in China, but I cannot give the name or go into details about the equipment," a spokesman said. He declined to say whether the firm would ask to start shipping 0.18-micron tools into China.
Stronger call
Since Hua Hong-NEC introduced a 200-mm wafer fab to Shanghai in 1997, lobbying for faster migration to tighter linewidths has increased. With only two advanced fabs operating in China and two more being built, the call may not yet be strong enough to spur a policy change. But some said the high-profile NEC and Motorola fabs may be good places to start a controlled release of 0.18-micron technology.
With export-based business models, Hua Hong-NEC, Semiconductor Manufacturing and Grace say they need to migrate to be competitive. "At our early stage, many of our customers will come from overseas," said Grace's Tsai. "And as time goes on there will be more design houses here that will want more advanced processes."
Although Hua Hong-NEC primarily fills NEC Japan's DRAM orders, the fab is moving toward a foundry model. "The business share globally for 0.18 or less in the foundry business is less than 10 percent, so from a business point of view, having 0.25 micron is enough," said Toshio Ohta, executive vice president at Hua Hong-NEC. "But our customers are always looking at future technology, so we have to show our future milestones. Customers already worry that Chinese technology is behind, so they need to know that if they start business with Hua Hong-NEC that they will be able to remain competitive"
Philips Electronics China Group is building one test and packaging plant in China and in about two years will consider building a wafer fab as the internal market grows. "Everyone is producing more and more high-tech products in China, whether PCs, mobile phones or other businesses," said chief executive officer Rob Westerhof. "I think the companies that want to give old technology to China are really making a mistake. China is not interested."
SEMI has requested high-level meetings at the U.S. State and Defense departments to argue the case for liberalization. Connell-Dowling is hopeful, but because of recent friction in U.S.-China relations, she said, the administration is cautious. "We need to make them understand that these are commercial fabs and that this is commercial technology to produce commercial chips so that they can have a comfort level that will ease some of the burden on U.S. equipment suppliers," she said.
In Shanghai, Ohta at Hua Hong-NEC has seen such setbacks before, and the currently rocky state of Sino-U.S. relations is undermining his confidence. "At the very beginning of this project, we requested 0.25-micron technology, but it was rejected by the U.S. and Japanese governments," he said. "Only last year were we approved to set up 0.25 micron. It took three years of negotiation.
"Now my concern is the American government, especially [the shift] from Mr. Clinton to Mr. Bush. Their policies are completely different. After the change [in administrations], Department of Commerce policies have become stricter.
"But we hope that sometime in 2002, we will get this [0.18-micron] approval."
— Paul Kallender in Tokyo and Peter Clarke in London contributed to this story. |
