Chapter 450: The Beginning Of The Hurricane
Far away in China, the 7nm breakthrough—no one knew this was the beginning of a hurricane.
The outside world thought this was the end, a concentrated outburst of achievements after years of deep cultivation in the semiconductor industry by China’s chip national fund since 2018.
Media paid close attention, officials from various countries were very concerned, everyone had to come out and say something.
Like Europe, which basically has no chip industry at all, senior officials in Brussels of the European Union also came out to speak, saying things like China’s progress is certainly pleasing, we follow the advancement of global innovation, but we must ensure that this progress is based on fair competition, transparency, and sustainable development.
This was still considered friendly.
The unfriendly ones say we must strengthen strategic autonomy and ensure the resilience of the supply chain.
The subtext of the latter is saying, no matter how cheap your price is, I won’t consider purchasing your chip products, because buying them means losing autonomy.
Does Europe actually have any strategic autonomy?
Nord Stream was blown up, such an important event, no one investigates, no one dares to investigate, some sporadic exposés are drowned in the sea of information.
The influence of this event was just that.
The public doesn’t pay attention.
What is 7nm, what is the full industrial chain, what impact does it have if China masters it—over ninety percent of foreign public don’t care.
Some self-media on Youtube made educational videos to explain how remarkable this event is.
Especially European self-media bloggers who care about technology, because Europe also has a chip act, they hope to ensure that by 2030, 10% of global chips are produced locally in Europe through 43 billion euros investment.
Von der Leyen set the vision for Europe’s chip strategy in her 2021 state of the union speech.
European tech bloggers on Youtube compare the European Union’s plan with China’s progress, they emphasize the difficulty of this, this is the semiconductor full industrial chain starting from zero, there are too many places to breakthrough.
At the same time, they also start to imagine that Europe can also achieve it like China by 2030.
This is not just because of the idea that if China can do it, so can I, but more because Europe’s goals and difficulties are much lower.
America can ban ASML, but it can’t stop ASML’s lithography machines from being sold to Europe.
Europe doesn’t need to do much independent research and development work, they just need to rely on the existing supply chain of the free world, assemble a setup and that’s it.
Is there any difficulty in this?
Europe’s Youtube bloggers thought so.
Public in Europe and America don’t care at all, the video views are much lower than their usual videos.
In traditional media, this event was directly frozen and reported low-key.
Does the New York Times have a report? Yes, but ordinary readers have to flip five pages back on the official website to find this report, relying solely on push, it doesn’t even have one-tenth the heat of a random news draft scattered from a big T’s Twitter.
On the contrary, East Asia feels it more.
European officials are just talking big, East Asia is not, this concerns their vital interests.
Whether Korea or Japan, or the 4v region, they all have a large semiconductor industry.
This is the place with the densest semiconductor industry and the most brutal competition globally, any slight movement can cause a tsunami, let alone this hurricane that strikes at the core of the industry.
The conduction of the cold air is enough to reach everyone, whether engaged in the semiconductor industry or not, they will all be affected.
An engineer who has worked in the foundry department of Samsung Electronics for ten years wrote on an internal anonymous forum: “We always thought that at the 7nm node, China still has at least five years gap.
Now it seems we completely underestimated China’s chasing speed.
This is not just technology chasing, this is full independence of the supply chain.
This is fatal to our non-memory business.
If China’s domestic design companies start turning to domestic foundry, the orders we lose each year will not be ten percent, but thirty percent.
If this speed continues, when will they reach 5nm, and when 3nm, even 2nm, catching up with TSMC’s progress?
By that time, does Korea’s semiconductor industry still have a reason to exist? Will we be golden crossed by China like in the shipbuilding industry?”
For ordinary investors, semiconductors are the “ballast stone” of the national economy.
Fluctuations in related stocks cause volatility in national assets.
Korean media keeps discussing where the future way out for the Korean economy is, worrying that if the semiconductor industry advantage is gone, where is the new growth point? Calling on the Blue House to quickly give countermeasures, instead of just knowing to be friendly to China.
It’s hard to find an adjective to describe their inner feelings, anger, sadness, contempt, unease, etc., summed up, perhaps “not pleased” is the most appropriate.
In the laboratory of a precision chemical research institute on the outskirts of Tokyo, the air was filled with the faint smell of high-purity solvents and resin.
Yamaguchi is a senior engineer at Shin-Etsu Chemical, standing in front of a precision inspection instrument worth hundreds of millions of Japanese yen, hands in the pockets of his cleanroom suit, face expressionless, inner anxiety overflowing.
What he is responsible for is one of the company’s most core products, ultra-high-purity photoresist for EUV.
This photoresist is the blood of manufacturing 7nm and below chips, and Japanese companies have absolute discourse power in the global market.
Yamaguchi’s anxiety did not start today, it began with the so-called cooperation last year.
He recalled 2024.
At that time, company executives announced in a victorious posture that the complete set of technology, equipment blueprints, and detailed process flow for the 28nm mature process had been transferred to China at a jaw-dropping price.
“Yamaguchi-kun, we sold outdated tools, but earned research and development funds for the next ten years!” The sales director was beaming at the celebration banquet.
But Yamaguchi and his colleagues in the R&D department all knew clearly.
28nm is the engineering cornerstone of all subsequent processes.
In the bathroom at the celebration banquet, Yamaguchi ran into the sales director who came in right after, he reminded: “Chinese people are not buying chips, they are buying our roots, what we sold them is the full experience of how to manage a wafer fab.”
The sales director who was full of smiles at the dinner table silently lit a cigarette, in the puffing smoke, this middle-aged man’s face showed no positive emotions.
“Do we have a choice? We don’t, the MacArthur of this era is sitting on the cloud next to the Imperial Palace, forcing us to sell technology to our biggest competitor.
You know it, how could company executives not know, how could the ministers in Chiyoda not know?
But we have no choice, MacArthur is watching us, if we don’t obey his will a little, we will be taught a lesson from all sides.
The 4v next door is the best example.”
At that time, Yamaguchi just thought the leaders were the best actors, able to wear the appropriate mask in different occasions, not quite understanding the meaning in the other’s words.
Who is MacArthur? What’s wrong with 4v?
A year later today, he fully understood, that guy named John Adams Morgan, on one hand teaming up with China to harvest Taiwan Stock and capital market, on the other hand making Japan’s semiconductor industry dig its own grave.
In Yamaguchi’s view, perhaps the only good news is that Chinese people also have to plunge headlong into the big pit of NIL lithography machine.
On the afternoon when the China breakthrough news came, the R&D director gathered all core engineers.
The atmosphere in the meeting room was more oppressive than any lithography machine failure.
The R&D director cut straight to the point: “China market orders for our 7nm photoresist and precision polishing liquid are required to be cut by 25% next quarter.”
The room was dead silent.
A 25% cut means billions of Japanese yen in losses, and more importantly, China’s domestic material suppliers are entering the core production lines at a speed beyond expectations.
“But that’s impossible,” someone couldn’t help refuting, “China’s domestic photoresist can’t pass the impurity control on 7nm yield rate!”
The director sighed, pushed his glasses, and projected a report onto the screen.
“The problem is not here.
This report comes from our intelligence department.
The Chinese government is providing high subsidies for yield rate losses to wafer fabs using domestic materials.
They gave up short-term profits, using national power to forcibly iterate the quality of domestic materials.”
His gaze swept over everyone, tone becoming extremely heavy: “The 28nm technology we sold them allowed them to master the speed of process verification and error correction.
Chiyoda is wrong, they overestimated our control ability.
They thought controlling EUV equipment means China can’t make waves, actually completely wrong.”
Even privately, Japanese people dare not accuse the White House.
“Gentlemen, our advantage is no longer irreplaceable, but difficult to quickly replace.
Now, China has proven to the world that this quick timeframe is actually only one year.”
From that day on, Yamaguchi’s R&D tasks underwent a complete change.
In the past, their work was to refine and improve, raising the purity of existing photoresist to more decimal places, optimizing its exposure uniformity.
Now, superiors require him to completely shift focus to technological breakthroughs.
On the first page of his experiment record book, he wrote the new goal in red pen:
Next-generation EUV materials, delivery time advanced by one year.
Goal: Must achieve a new chemical structure and preparation process that cannot be imitated within five years.
Yamaguchi realized he is now racing against time, racing against the input of a national machine.
The purity of photoresist concerns Japan’s position in the global semiconductor supply chain.
He felt he was no longer a craftsman, but a vanguard soldier desperately running in the storm holding a torch.
In the evening, Yamaguchi sat on the tatami at home, his wife preparing dinner in the kitchen, the TV playing a special report on this matter.
A former Ministry of Economy, Trade and Industry official had an ashen face on the program:
“This is the complete failure of Japan’s industrial strategy! We were content to sell mature technology, satisfied with short-term profits, yet lost the ability to think of danger in peace.
China’s achievement of 7nm proves how arrogant and fragile our confidence in technical barriers was.
We thought we were the blood supplier of the industrial chain, but ended up as the accelerator.
Japan’s technological accumulation is becoming the accelerator for China’s independent development!”
His wife came over, handed him a cup of hot tea, and asked worriedly: “Yamaguchi-kun, will this really affect us? Didn’t your company say their materials can never reach your purity no matter what?”
Yamaguchi said helplessly: “That’s the past logic, now the logic is different.
Chinese people have proven that engineering problems can be solved with time, money, and national will.
They are digging their own wells.
We once controlled the water source, now we must dig deeper and faster than them.”
In 4V, this sense of crisis is the most direct and intense.
The economic structure here is deeply tied to the semiconductor industry, one foundry giant supports the region’s economic skyline.
China’s 7nm breakthrough, to practitioners on the island, is no less than a small earthquake.
A senior engineer at TSMC, at a gathering with colleagues after work, summed up the mood in one sentence: “The wolf has really come. The moat we thought in the past has been proven crossable. How much longer can we lead with 3nm, 2nm? Five years? Three years? This is not a technological contest, this is a full confrontation between a national will and a regional industry.
Our advantage lies in the vast ecosystem and client base, but if clients start being required or encouraged to choose domestic supply chains, that will be pulling the rug out.”
Another colleague said directly: “Isn’t this nonsense? How could China not support its own companies, how could it hand orders to us?
To put it this way, short as half a year, long as one year, we will see all orders for 7nm and above processes in the entire China region disappear completely.”
This sense of crisis transcends the industry and permeates all aspects of society.
The discussion heat in media is unprecedented, from finance channels to political commentary programs, all repeatedly analyzing the impact of this event.
Ordinary public, even if not understanding chip details, know what this means: the economic foundation has been shaken.
The chip shield has turned from a shield into a piece of paper, the White House is still constantly trying to move 4v’s semiconductor industry to America本土.
How much longer can their economic advantage hold?
No one can give an answer.
In the video conference, both sides are Chinese people.
“Now, we have achieved 7nm full domestication.
My superiors, and the entire board of directors, all require me to make de-risking of the supply chain the top priority.”
