Foreign media: U.S. equipment suppliers are slow to approve SMIC’s export applications

According to Reuters, despite the spread of global chip shortages, the U.S. government’s approval of license approvals for American companies such as Lam Research Corp and Applied Materials Inc to sell chip manufacturing equipment to Chinese semiconductor giant SMIC is still progressing slowly.

According to many industry insiders, although many companies filed applications in December, many US suppliers have not obtained licenses to sell equipment and materials to SMIC. They also pointed out that certain licenses have been granted, including licenses for a small number of expensive equipment reported in recent days.

At the end of last year, the Trump administration added SMIC to the embargo list, which requires U.S. suppliers to obtain a license before shipping products to SMIC. This is unusual because it says that most products should Granted according to specific circumstances. However, equipment that can only be used to manufacture the most advanced 10nm and smaller process chips may be denied permission.

According to reports, the relevant authorities should make a decision on the review of the permit application within one month of receiving the application, but follow-up issues will stall the matter.

A company spokesperson for Lam Research said: “The company is still in the application process and has not yet received a response.”

The Chief Financial Officer of Applied Materials said on the February 18 earnings call that his forecast did not assume that the license would pass. A spokesperson for the Santa Clara, California-based company declined to comment further on these license issues this week.

SMIC did not respond to a request for comment, but SMIC emphasized that the company only provides services for civilian and commercial end users and has nothing to do with the Chinese military.

The source said that because government officials asked follow-up questions about the application, there was an article that partially determined whether the parts or components can be transferred to produce products of 10 nm or smaller, so the decision on the license has been shelved.

Giovanna Cinelli, a trade lawyer in Washington, said that many permit applications have resulted in “frequent back and forth, thereby extending the review period.”

In a statement, officials of the Ministry of Commerce denied the possibility that SMIC’s restrictions could lead to a shortage of chips, and pointed out that the shortage was related to old technology, while SMIC’s restrictions were related to leading technology. The statement did not address the potential impact of the delay in licensing the old technology.

It can be seen from the report that the two main suppliers of production equipment, Applied Materials and Lam Research, have submitted many license applications, hoping to sell the equipment to SMIC. But industry sources say that most have not yet taken action.

A spokesperson for advanced materials supplier Entegris Inc. said the Massachusetts-based company has submitted 10 applications to sell to SMIC and obtained the first license in the past week.

Equipment companies including KLA Corp of California and Axcelis Technologies Inc of Massachusetts also supply SMIC, but a spokesperson for KLA declined to comment on the application. The chief executive of Axcelis discussed the license application on February 11. When talking about “uncertainty,” a spokesperson for the company declined to provide an update.

Cymer of San Diego produces deep-ultraviolet light sources, and it is also one of the suppliers that requires a license to send parts to SMIC. A spokesperson for the Dutch chip equipment manufacturer ASML, which owns Cymer, also declined to comment on the license application, saying she could not discuss customer-specific information.

Industry sources said that Qualcomm has used Chinese foundries to produce chips with decades of technology, and they have also applied for them, just in case the equipment manufacturer does not obtain a license for the tool. The source added that they have not yet been resolved.

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