SMIC VP Stresses On Need For Advanced Packaging, Local Supply Chain For Global Lead

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Semiconductor Manufacturing International Corporation's (SMIC) new vice-chairman  Mr. Chiang Shang-Yi whose appointment to the company became a source of controversy after SMIC's Co-CEO Mr. Liang Mong Song seemingly resigned in protest to his nomination to the company's board spoke at the end of last week for the first time in his official capacity as the Chinese chipmaker's executive. Mr. Chiang's shared his beliefs regarding the current stage of the chip industry and how he expects to navigate his company through the highly technical nature of the industry dominated by the Taiwan Semiconductor Manufacturing Company (TSMC).

SMIC VP Believes Advanced Packaging Technologies Equally Important As Process Node Advancement In Modern Chip Era

The executive's comments cover a wide variety of topics, the most important of which cover his. beliefs about leading-edge chip manufacturing processes and advanced packaging techniques which often link individual chips to form larger ones - and in the process overcome the yield disadvantages that accompany the fabrication of larger chips.

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His prowess lies mainly in the packaging arena, with Mr. Liang (who has also served under Mr. Chiang previously in his career) being responsible for process nodes. Soon after Mr. Chiang joined SMIC, industry sources speculated that his appointment was intended to boost the company's capabilities in advanced packaging, especially since sanctions by the United States Department of Commerce (DoC) make it difficult, if not impossible for the company to manufacture latest chips through the 7nm Extreme Ultraviolet (EUV) and 5nm process nodes.

In his statements which were made during SMIC's Annual Conference, Mr. Chiang stated that advanced packaging technologies are the need of the hour. This, according to him, is due to the fact that Moore's Law is close to its physical limit and the current environment of fabricating chips does not allow a return to Moore's Law.

Chiang Shang-Yi (left) and Liang Mong-Song pictured above.

Mr. Chiang then shared his viewpoints on the need for advanced chipmaking processes today. These processes, which are often marketed using the physical dimensions of a single transistor that they can 'print' on a silicon wafer, are found at the heart of the latest tech products such as smartphones, central processing units (CPUs) and graphical processing units (GPUs).

According to the vice president, a handful of products with high demand are the ones that require processors manufactured using the aforementioned chip processes. These processes involve a large variety of rapid changes to the design, but the demand for their products is not necessarily large. He also believes that packaging and circuit board manufacturing are the current bottlenecks that the chip industry is facing, as all focus remains on manufacturing processes. At this front, Mr. Chiang stated that SMIC will develop both advanced manufacturing processes and packaging technologies.

He then proceeded to describe the nature of the chip supply chain. According to him, the Chinese chip industry needs to establish a complete company ecosystem for ensuring competitiveness on the global stage. The current chip supply chain is undergoing reorganization as different applications require different chips and different chips require different materials.

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Some of the companies that need to be a part of this ecosystem include those producing manufacturing equipment, raw materials such as chemicals for cleaning, silicon wafers, electronic design automation (EDA) tools, packaging and testing materials and inspection tools.

One of the biggest bottlenecks that China is currently facing when it comes to local chip production is access to the EUV machines which makes manufacturing advanced chips much easier than is possible with non-EUV machines. These machines were the subject of the recent American sanctions which aim to cut off the Chinese military's access to the latest tech products developed through U.S.-origin technology.

The author has no position in any of the stocks mentioned. NewAgeAds LLC has a disclosure and ethics policy.
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