A newly revealed patent from Chinese lithography systems maker Shanghai Micro Electronics Equipment (SMEE) shows how domestic firms could progress in the local advanced lithography tools market despite US sanctions.

 

The “extreme ultraviolet [EUV] radiation generators and lithography equipment” patent, filed in March 2023, was published publicly on Tuesday and is still being vetted by the China National Intellectual Property Administration, according to a record from company registry website Qichacha.

The patent shows how SMEE is progressing in EUV lithography, which is considered the Achilles’ heel of the Chinese semiconductor industry. Despite years of efforts, SMEE remains behind ASML in reliably mass producing lithography gear that can be used for processes at the 28-nanometre level and below.

Netherlands-based ASML currently has a near monopoly on EUV machines, and it has been restricted from exporting that equipment to China since 2019.

SMEE was added to a US Commerce Department blacklist in December 2022, along with 35 other Chinese companies, which also restricted its ability to import certain US technologies.

 

China’s market for lithography machines, which print highly complex circuit patterns onto silicon wafers, is 99 per cent controlled by ASML and Japanese companies Nikon and Canon. Only the Dutch firm produces machines capable of making chips smaller than 7-nm.

ASML is now facing mounting pressure to serve customers on the mainland, its second-largest market by revenue in 2023 after Taiwan. It has been only able to fill 50 per cent of orders from China due to a heavy backlog, according to its 2023 annual report.

As of September 6, when the Netherlands updated its export restrictions, ASML requires a licence to provide spare parts and software updates for its lithography systems in China. Servicing the equipment is also regulated, Reuters reported, citing a Dutch government statement.

In 2023, EUV machines accounted for 42 per cent of AMSL’s system sales of €21.9 billion (US$24.2 billion), as global foundries from Taiwan Semiconductor Manufacturing Company to Samsung Electronics snapped up these tools to continue manufacturing chips down to a 3-nm grade.

EUV lithography uses light with a wavelength of just 13.5 nanometres – nearly X-ray level – a reduction of almost 14 times from deep ultraviolet lithography, which uses 193-nm waves. The advanced EUV scanners are considered necessary for mass producing semiconductors smaller than 7-nm, as they provide better production yields, a measure of the percentage of non-defective items produced in a manufacturing process.

China’s top foundry Semiconductor International Manufacturing Corporation, which is also under US sanctions, had to resort to multiple patterning in its 7-nm process node to make the system-on-a-chip powering Huawei’s flagship Mate 60 handset issued last year at the expense of lower yields.