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At the spearhead of China’s semiconductor industry, Semiconductor Manufacturing International Corp. (SMIC) holds the fate of the country’s progress in chip technology. Yet, SMIC’s persistent difficulty with obtaining the EUV lithography machines from ASML has impeded its development, and voices within China’s semiconductor industry have begun to eye advanced packaging, especially heterogeneous integration, as a path on which China can go beyond Moore’s Law. 

By integrating separately manufactured components into a higher level assembly, therefore achieving better functionality at lower costs, heterogeneous integration is regarded by some as an alternative to the chip industry’s current trajectory of squeezing in ever more transistors on a monolithic IC design with higher costs. 

For China, whose chip industry is playing catch-up and impeded by U.S. sanctions, heterogeneous integration has become especially attractive. 

Bypassing Moore’s Law? 

A former VP of SMIC’s R&D department, Hanming Wu, has for example called into question the industry’s pursuit of Moore’s Law, and instead emphasized a chip’s overall performance on a systematic level. He noted that a certain Chinese startup, through heterogeneous integration, had successfully achieved a chip performance on par with 16nm process technology, despite using 40nm technologies. 

Wu further argued that China should focus on mature nodes that it could independently manufacture without foreign equipment, such as the 55nm node. Wu considered it “more meaningful” to build a complete domestic supply chain for mature nodes than pursuing the 7nm node which largely relied on imported equipment.

No one-size-fits-all solution 

Advanced packaging, meanwhile, is gaining traction worldwide. According to the market research firm Yole Développement, the share of advanced packaging in the total semiconductor market is increasing continuously and will reach almost 50% of the market by 2026. TrendForce indicates that China’s largest semiconductor packaging company, JCET Group, is already among the OSAT sector’s top five in terms of market share and capital expenditure. Other Chinese semiconductor packaging companies, such as TongFu Microelectronics Corp. (TFMC) and Tianshui Huatian Technology (TSHT), respectively ranks the 6th and 7th in global market share.

In an interview with TechTaiwan, a former top executive deeply involved with China’s semiconductor development indicated that advanced packaging didn’t have a high entry barrier, and it wasn’t difficult to develop it in China. However, the industry leader, who didn’t wish to be named, indicated that even though China indeed had a large demand for mature nodes, advanced process technologies could not be neglected. “In the currently tense geopolitical environment, China has to develop the capability of manufacturing at advanced nodes,” said the source. “Heterogeneous integration is only beneficial for some products.”

Despite the lower entry level of advanced packaging, China’s semiconductor packaging industry still, to an extent, depends on imported equipment and material. In addition, the industry’s progress has been largely attributed to foreign acquisitions, lacking domestic breakthroughs.