Young said he was so excited that he couldn't stop and wanted to have a good chat with Cheng Gang about his understanding of semiconductors and the development of alternative domestic semiconductors:

"Next, back to our topic, what are the challenges of 14 nm lithography machines?"

“Let’s talk about Fi first, which is the 3D MOSFET device structure first proposed by Professor Hu Zhengming, a famous professor at the University of California, Berkeley.”

"3D MOSFET achieves performance beyond the previous generation of planar transistors through a three-dimensional structure. Intel took the lead in commercializing it in 2011. But after the 14 nm process, Fi became no longer as reliable as before."

"The first is the inescapable quantum effect. It is difficult to increase the current of a transistor. Even for some materials, the current will become lower. For chips, current means speed."

"Then there is leakage current, which is directly related to power consumption. At such a small node, it is difficult for Fi to control leakage."

"The last thing is cost. According to Moore's Law, as nodes decrease, the cost of a single transistor should decrease."

"But with the 14nm process, the cost of a single transistor may rise due to the complicated photolithography process."

"SMIC can handle the 14nm process, but why has the stock price failed to rise?"

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

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

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

.”

(After picking up SMIC’s financial reports from 2020 and 2021, its largest source of revenue is the 55/65nm process, while the 14/28nm revenue accounted for 7.8% in the first quarter of 2020. By the first quarter of 2021, the proportion will be 7.8%.

The increase turned into 6.9%)

Note: This is just to say that SMIC’s 14nm is not as good as expected, not that SMIC has not developed a 14nm process.

Young continued: "The difficulty of chip foundry is lower than that of photolithography machines."

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

"The OEM process will encounter fatal problems, and the photolithography machine cannot escape them."

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

"So lithography is the most important part."

"So a very obvious question arises, how to ensure that so many steps of photolithography can be engraved on the same position on the silicon wafer."

"In the 14nm process, the line width was 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 outsiders imagine."

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

"Currently, photolithography machines must ensure a production rate of 125 wafers per hour. Otherwise, semiconductor manufacturers will lose money."

"There are really too many lessons we need to make up for here," Young said in a distressed tone.

Although Young often uses an English name, he is indeed Chinese and has an undergraduate degree from Shenhai Jiaotong University.

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

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

Young also expressed emotion: "There are too many things to catch up with in the semiconductor field, and we cannot catch up in a short while."

"It is not at all what the media exaggerates. Buying a photolithography machine can solve production problems. It also takes time to debug the photolithography machine with the mask and train skilled workers."

Cheng Gang is more optimistic than Young: "I think we are taking the right route, relying on China's vast market to cultivate a complete semiconductor industry chain."

"Of course there are many difficulties, but they can only be overcome one by one."

Young: "You are more optimistic than me. We haven't even finished the 28nm lithography machine yet. Europa's 3nm process is already close at hand, not to mention that their technical route from 3nm to 1nm has been planned."

"The gap is a bit big."

There was still something in Young's mind that he didn't say out loud. With such a big gap, if he wanted to overtake in a corner, he would have to open up a new track and use a completely new technical route.

Otherwise, Young would not see any hope of overtaking in the current silicon-based semiconductor industry.

Cheng Gang comforted: "I had a similar feeling when I was in the financial world. In many fields, there was a gap with foreign countries. It seemed that there was no chance to catch up."

"Because risk control is a required course in the financial industry, we always see risks first and control them when we think about them."

"After joining the industry from the financial world, I often think about what I want to do and how to achieve my goals."

"The financial world and the industrial world look at the problem from completely different perspectives."

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

"As for Kechuang Biotech's brain-computer connection chip, even if foreign manufacturers use more advanced chips based on the 14nm process, we are confident that the 14nm brain-computer connection chip can be optimized to be better than the foreign 7nm."

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

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

Cheng Gang was shocked: "How did you know we were going to make an AI chip?"

Young stood up and walked around: "Don't be so surprised. There are no secrets in the investment community. The so-called secrets are just a matter of time when they are leaked."

"When you went to Goose Factory to ask Seind before, after we got the news, we guessed that Kechuang Biotech was going to invest in AI chips, and even wanted to enter the AI ​​chip industry ourselves."

"And your company's vice president recently led a team to England, and also brought a group of people including legal affairs, translation, business, financial technology, etc. Isn't it obvious that he is going to discuss acquisitions?"

"These are not secrets. If you have been in the investment circle before, you should know how fast news from leading investment institutions can be."

Shunwei Capital is not considered a leader, but can barely be considered a mid-tier company.

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

Young stated his purpose: "IDG and Goldman Sachs can help Kechuang Biotech deal with the matter of being included in the entity list. We need to invest in seind ​​together."

What Young said was 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: "We have already entered the list. We can't do it for the time being. We can guarantee that Kechuang Biotech will not change from the unverified list to the entity list in the near future."

The Unverified List is simply for Amerikan businesses wishing to do business with companies on the list to perform additional due diligence.

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