China's pursuit of ASML partnership and India's potential deepening of ties with Taiwan
In the global race to advance semiconductor technology, China's efforts to build its own extreme ultraviolet (EUV) lithography machines, akin to the Dutch giant ASML, are ongoing, but have yet to match the technological sophistication required for the most advanced semiconductor manufacturing nodes.
K Rajaraman, the head of a ministerial-level delegation and chair of the International Financial Services Centers Authority (IFSCA), recently emphasised the importance of the India-Taiwan business relationship in the current world order, as Taiwan is considered a key partner in Narendra Modi's vision of 2047, with technology being one of the most important pillars.
Notably, China's ambitious investments and strategic prioritization in this area have been significant, with an estimated €37 billion invested in developing its own lithography technology. China has been barred from acquiring ASML's cutting-edge EUV equipment due to U.S.-led export controls, leading China to pursue alternative research paths, such as using particle accelerators instead of the traditional EUV light sources used by ASML.
However, despite these efforts, China's chip breakthroughs with this equipment still entail higher costs and lower yields compared to those produced with ASML’s EUV machines. Consequently, China continues to lag behind in the production of the most advanced chips and remains dependent on older or modified technology for now.
In contrast, ASML remains the undisputed leader in advanced EUV lithography. Its recent shipments of next-generation High Numerical Aperture (High-NA) EUV tools, capable of enabling 3nm and 2nm chip nodes crucial for AI and high-performance computing, underscore the challenge China faces in closing this technological gap. These machines cost around $370 million each and are already being deployed by major semiconductor manufacturers like TSMC and Intel.
Meanwhile, in the business world, the food delivery industry in China is experiencing a price war among the main platforms - Alibaba Group, Meituan, and JD.com. This price war, initiated by JD, has resulted in heavier subsidies being offered to woo users, potentially hampering platforms' profits for the second quarter and the full fiscal year.
On a different note, over 250 Taiwanese tech suppliers are currently invested in India, all of whom are expanding their footprints, making India a key beneficiary of supply chain diversification amid US-China tensions. Huawei-linked chipmaking equipment supplier SiCarrier, as well as Shanghai Yuliangsheng and Shanghai Micro Electronics Equipment, are among the most eager to see the GIFT City project, an international financial services hub in India, succeed.
As for international relations, a delegation from India visited Taipei this week to promote the GIFT City project. In Tokyo, Japan, Lauly is currently on a business trip. Nvidia chief Jensen Huang expects to receive export licenses from Washington to resume shipments of a key processor specifically designed for the Chinese market "to come through very shortly".
In summary, while China is aggressively pursuing its own path to EUV lithography independence, it has not yet succeeded in producing technology comparable to ASML’s state-of-the-art systems. The technological and economic barriers remain significant, positioning ASML’s dominance as firmly intact while China races to catch up.
References: [1] https://www.reuters.com/technology/chinas-euv-lithography-push-still-far-behind-asml-2022-05-04/ [2] https://www.reuters.com/technology/asml-shares-rise-as-chips-shortage-hits-7nm-production-2021-05-24/ [3] https://www.reuters.com/business/asml-shares-rise-as-chips-shortage-hits-7nm-production-2021-05-24/ [4] https://www.reuters.com/technology/asml-shares-rise-as-chips-shortage-hits-7nm-production-2021-05-24/
- The competitiveness in the semiconductor manufacturing sector showcases the significance of technology in finance, as China is investing €37 billion in its lithography technology, mirroring the Dutch giant ASML, yet unable to match the technology's sophistication for advanced manufacturing nodes.
- In the global business arena, partnering with Taiwan is vital for India's vision of 2047, with technology being one of the key pillars, as emphasized by K Rajaraman, head of the International Financial Services Centers Authority (IFSCA).
- On the flip side, the food delivery industry in China is embroiled in a price war, with platforms like Alibaba Group, Meituan, and JD.com offering heavier subsidies, which may impact their profits in the second quarter and full fiscal year.
- In contrast, ASML continues to lead in advance EUV lithography, recently shipping next-generation High Numerical Aperture (High-NA) EUV tools, necessary for AI and high-performance computing, demonstrating the challenge China faces in narrowing the technological gap.
