Does SMIC purchase USD 1.2 billion in Asim products, including EUV lithography machines?
Source: China Electronics News 2021-03-08
On the evening of March 3, SMIC announced on the Hong Kong Stock Exchange that the company signed a purchase order with the Asim Group for the purchase of Asiml products used in the production of wafers. According to the pricing of the Asmer products purchased by Asmer’s purchase order, the total value of Asmer’s purchase order is US$1.2 billion.
ASM is the world's largest manufacturer of lithography equipment and the only company in the world that can produce EUV lithography machines. At this stage, the downstream demand of the semiconductor industry chain has surged. As the largest foundry in China, SMIC is increasing its capital investment in semiconductor equipment and launching transactions with Asimer to accelerate capacity expansion.
It is understood that the time limit of the Asme bulk purchase agreement has been extended from January 1, 2018 to December 31, 2020 to from January 1, 2018 to December 31, 2021. According to the bulk purchase agreement, SMIC has signed a purchase order with the Asim Group for the purchase of Asim products for the production of wafers during the 12-month period from March 16, 2020 to March 2, 2021.
In addition to the extension of the time limit, the purchase amount of this purchase order is also disclosed in the announcement. According to the pricing of the Asmer products purchased by Asmer’s purchase order, the total value of Asmer’s purchase order is US$1.2 billion. In terms of procurement methods, SMIC needs to pay a 30% down payment, and the rest is paid at the time of delivery.
Different types of equipment promote SMIC's R&D and production capacity differently, and are related to SMIC's capacity to expand production of low-end and high-end chips. Regarding the details of the products and machine models included in the US$1.2 billion order, SMIC has not yet released the relevant information, and has kept a low profile in the face of the media.
During an interview with Jin Cunzhong, Deputy Secretary-General of the China Electronic Special Equipment Association, the reporter learned that since SMIC's procurement of high-end equipment is still under control, there is no possibility that SMIC will purchase EUV lithography machines this time. Jin Cunzhong told reporters that what SMIC purchased from Asmar this time should be the equipment required for 14nm and above process production, namely DUV lithography machine. In addition, CVD, etching, ion implantation, oxidation furnace, CMP, PVD and thin film measurement equipment are also equipment that SMIC needs to purchase.
Mo Dakang, a well-known semiconductor industry expert, also believes that it is impossible for SMIC to buy EUV lithography equipment this time, but it has greater purchase rights for many equipment other than EUV lithography machines.
KLA, Applied Materials, or SMIC's next order object
ASM is the world's largest lithography machine manufacturer and the only company in the world that can produce EUV lithography machines, and monopolizes the world's top lithography machine market. SMIC has always been a customer of Asmar in mainland China, and has frequent business dealings with Asmar, and the two have a direct supply relationship between upstream and downstream.
Jin Cunzhong told reporters that the signing of a purchase order between SMIC and ASM is related to the fact that SMIC's 14nm and above process production equipment was approved by the United States. After the mature process equipment is approved by the United States, SMIC may focus on the development of logic circuits, power semiconductors and other fields, with 14nm-90nm being its research and development focus. Since the end of 2020, 8-inch wafer production capacity is in short supply, and the process technology supported by 8-inch wafers is 90nm. At this stage, it has been moved up to 65nm. Therefore, SMIC’s mature process equipment has been approved by the United States for this time. SMIC further expanded production and achieved higher revenue.
It was only recently that the news of obtaining a supply permit came out, and SMIC immediately signed a huge purchase order with Asmar. What signal did SMIC reveal? Mo Dakang believes that this approach of SMIC may be a precautionary move. Mo Dakang told reporters his guess that the current international situation is still complicated, there are many uncertain factors, and there may also be variables in the published policies. Therefore, SMIC can only take a long-term view and make long-term purchase plans as far as possible. Stock up.
In the foreseeable future, SMIC may conduct transactions with more manufacturers. Mo Dakang believes that KLA, which can provide linewidth measuring instruments, and Applied Materials, which can provide epitaxial process equipment, may be the target of SMIC's next order, but the equipment purchased will also not involve advanced process research and development.