► Written by Observer Network, Lü Dong, Edited by Zhou Yuanfang
In the field of advanced technologies such as semiconductors, the United States frequently intervenes in normal market competition through administrative means. Just a few days ago, Biden signed a $280 billion chip bill that restricts semiconductor giants from investing in China, and now the U.S. Department of Commerce has imposed export controls on several new technologies.
On August 12 local time, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced that, for national security reasons, four “emerging and foundational technologies” would be included in new export controls. These four technologies are: fourth-generation semiconductor materials gallium oxide and diamond, which can withstand high temperatures and high voltages; ECAD software specifically designed for chips at 3nm and below; and pressure gain combustion technology applicable to rockets and hypersonic systems.
Although BIS did not directly mention China, Yang Jie, a senior partner at Huiye Law Firm, pointed out to Observer Network that China is now one of the countries listed by the U.S. for national security controls. As long as technologies and items are included in the U.S. government’s export control list, it is highly likely that export restrictions will be imposed on China, such as requiring U.S. companies to obtain licenses for exports to China, which will effectively decouple the U.S. and China in the semiconductor field.
Image Source: BIS
U.S. Deputy Secretary of Commerce Alan Estevez stated in the announcement that the purpose of the export controls is to ensure that “companies around the world can operate in a fair competitive environment.” He mentioned that technological advancements have made technologies such as semiconductors and engines operate faster, more efficiently, and more durably, even under harsher conditions, which could make them game changers in commercial and military fields.
BIS claimed that including these four technologies that support the production of advanced semiconductors and gas turbine engines in export controls is the result of an agreement reached by the 42 participating countries of the Wassenaar Arrangement at their plenary meeting in December 2021. Additionally, the U.S. is controlling more technologies, including equipment, software, and technologies used for semiconductor production, which exceed the items agreed upon in the Wassenaar Arrangement.
Despite the U.S. claiming to act on behalf of 42 countries, foreign media such as Russia’s Sputnik have long revealed that the Wassenaar Arrangement is actually completely controlled by the U.S. When a country in the arrangement intends to export a high-tech item to China, the U.S. even intervenes directly. For example, when the Czech Republic planned to export “passive radar equipment” to China, the U.S. pressured the Czech Republic to halt the transaction.
“Export controls are a means for the U.S. to compete with other countries,” Yang Jie pointed out to Observer Network, noting that as China intensifies its investment in semiconductors, the U.S. is trying to hinder the development speed of China’s semiconductor industry to maintain its own advantage.
Regarding the U.S.’s frequent use of sanctions, foreign scholars have criticized that if the U.S. wants to maintain its global leadership in the electronics industry, it should invest more in future technological knowledge to compete with China. So why does the U.S. choose the route of sanctions? Because sanctions are easier to implement, while building a society that values knowledge is more difficult. This is a pathology of late capitalism.
In the announcement, BIS provided detailed information about the four newly controlled technologies (with additional comments from Observer Network).
Gallium Oxide (Ga2O3) and Diamond
BIS announced that gallium oxide and diamond are semiconductor materials that can operate under harsher conditions, capable of withstanding higher voltages or temperatures, and devices produced with these materials have greater military potential.
According to material properties, semiconductor substrates can currently be roughly divided into four generations:
The first generation is represented by silicon (Si) and germanium (Ge), mainly used in low-voltage, low-frequency, low-power power devices and integrated circuits;
The second generation is represented by gallium arsenide (GaAs) and indium phosphide (InP), widely used in optoelectronics and microelectronics;
The third generation is represented by wide bandgap semiconductors such as silicon carbide (SiC) and gallium nitride (GaN), which have significant advantages in dielectric constant, thermal conductivity, and operating temperature, and are gradually being applied in 5G communications, new energy vehicles, photovoltaics, and other fields;
Gallium oxide and diamond are considered fourth-generation semiconductor materials.
Professor Li Chengming from the University of Science and Technology Beijing has introduced that gallium oxide is a new type of ultra-wide bandgap semiconductor material, with a bandgap width of 4.9 eV, higher than silicon carbide’s 3.25 eV and gallium nitride’s 3.4 eV, ensuring its radiation resistance and high-temperature resistance, and can maintain stable properties in extreme environments such as high and low temperatures and strong radiation; its high breakdown field strength ensures that gallium oxide devices can be used at ultra-high voltages, which is beneficial for improving carrier collection efficiency.
According to a market survey by Fuji Economic in June 2019, the global market for gallium oxide power devices is expected to reach 154.2 billion yen (approximately 9.28 billion RMB) by 2030, which even exceeds the market size of gallium nitride power devices (108.5 billion yen, approximately 6.51 billion RMB).
Currently, major companies, universities, and research institutes conducting research on gallium oxide have high hopes for its performance, but many key bottlenecks need to be resolved before practical applications can be realized. The obstacles encountered in research mainly include two aspects: one is the production of large-size high-quality single crystals, with only Japanese companies having developed 6-inch single crystals, but mass supply has not yet been achieved. The second is that gallium oxide materials for high-power, high-efficiency electronic devices are still in the laboratory stage of development, lacking large-scale practical applications.
This year, the Chinese Ministry of Science and Technology has included gallium oxide in the “14th Five-Year Plan Key R&D Program.” Meanwhile, the U.S. is vigorously developing gallium oxide materials from the perspective of advanced military technology layout. The U.S. Air Force Research Laboratory, U.S. Navy Laboratory, and NASA are actively seeking cooperation with U.S. universities and global companies to develop gallium oxide power devices that can withstand higher voltages, are smaller in size, and more radiation-resistant.
It should be noted that although there is a generational division among semiconductor substrate materials, it cannot be generalized that “the later generation is superior to the earlier generation.” Second and third-generation semiconductors cannot replace first-generation semiconductors; rather, they are applied in different fields based on the characteristics of different materials.
Electronic Computer-Aided Design Software (ECAD)
ECAD is a category of software tools used for designing, analyzing, optimizing, and verifying the performance of integrated circuits or printed circuit boards.
BIS announced that the ECAD software included in the control scope is specifically used for developing integrated circuits with a Gate-All-Around Field Effect Transistor (GAAFET) structure.
The GAAFET transistor structure is key to achieving technology nodes of 3nm and below. This technology enables the production of integrated circuits that are faster, more energy-efficient, and more radiation-resistant, which can be used to advance many commercial and military applications, including defense and communication satellites.
In June of this year, Samsung began mass production of 3nm process chips using GAAFET technology, but has not disclosed specific customer names. TSMC has announced that the 3nm process will still use FinFET transistor structures, and GAAFET structures will only be used for the 2nm process at the earliest.
It has been noted by semiconductor industry media that chips manufactured using GAAFET transistor structures are expected to improve performance by 25% and reduce power consumption by 50%. In contrast, improvements in performance and power consumption using FinFET structures are generally in the range of 15% to 20%. However, the difficulty and cost of the two technologies are likely not the same.
Senior consultant Zhan Kai from Yuanda Law Firm pointed out to Observer Network that the ECAD software used for developing GAAFET transistor structures will be added to the new export control classification number 3D006 under the Commercial Control List (CCL). For countries/regions marked with an “X” in the NS list, export licenses will be required for national security (NS) and anti-terrorism (AT) reasons, including China as a restricted country.
He believes that the strict restrictions on the EDA field by the U.S. are relatively difficult, which will cause great harm to the semiconductor industry, which is already facing severe uncertainty. The temporary ban taken by the U.S. is consistent with previous judgments, mainly targeting “advanced processes of 3nm and below” ECAD, rather than EDA products that are needed across the entire product line and industry chain. From this perspective, the U.S. export control policy of “small courtyard and high walls” has not changed.
Currently, several EDA manufacturers such as Huada Jiutian, Guangliwei, Kailun Electronics, and Xinheng Semiconductor have emerged in China. However, Huada Jiutian, regarded as the leader in domestic EDA, revealed in its prospectus last year that the company’s analog circuit design and verification tools do not yet support advanced process designs of 16nm and below.
Image Source: Huada Jiutian Prospectus
Pressure Gain Combustion Technology (PGC)
BIS announced that pressure gain combustion technology has broad application potential in land and aerospace fields, involving applications such as rockets and hypersonic systems. In 2020, the U.S. National Academy of Sciences listed pressure gain combustion and other technologies among the top ten priority research areas for advanced gas turbines. This technology utilizes various physical phenomena, including resonant pulse combustion, constant volume combustion, and detonation, leading to an effective pressure increase across the combustor while consuming the same amount of fuel, with the potential to improve gas turbine engine efficiency by over 10%. However, BIS has not yet confirmed any engines currently in production that use this technology, but there is a significant amount of research pointing to potential production.
According to the BIS announcement, export controls on gallium oxide, diamond, and pressure gain combustion technology will take effect on August 15 of this year, while export controls on ECAD software will take effect 60 days after August 15.
Yang Jie told Observer Network that after these four technologies are included in the new export controls, the U.S. government may set new licenses and requirements. The serious impact on U.S. national security mentioned by BIS often poses a certain threat to U.S. military advantages. In the future, it is not ruled out that the U.S. will include more new technologies and items that it has a certain advantage over into export controls, thereby strengthening its suppression of China.
He analyzed that the U.S. export controls set different control requirements for different items and end users. For example, the same semiconductor material may not require a special license for export to the UK, but may require a special license for export to China, and it may even be prohibited from being exported to China. Companies listed on the entity list in the U.S. are likely unable to obtain licenses.
“For Chinese companies, if the U.S. accelerates decoupling from China in the semiconductor field in the future, they may need to accelerate de-Americanization, meaning they should try to reduce dependence on the U.S. in the semiconductor field. On the other hand, they also need to be cautious about whether their suppliers are companies that have been sanctioned by the U.S. If they engage in transactions with companies that are sanctioned by the U.S., they may also face U.S. sanctions,” Yang Jie analyzed.
Regarding the U.S.’s frequent use of export controls and other means to suppress Chinese companies, the Chinese Ministry of Foreign Affairs has long expressed its stance: the U.S. uses state power to generalize national security, continuously abuses export controls and other measures to suppress and contain specific enterprises of other countries, which is a serious violation of free trade rules, a serious threat to the security of global industrial and supply chains, and a serious harm to the welfare and interests of people in all countries, including the U.S.
Although the probability of the U.S. continuing to suppress related industries in China is high in the current environment, some industry insiders have pointed out to Observer Network that the means available to the U.S. are actually quite limited, and it is not possible to easily “close the door” on any company as U.S. Secretary of Commerce Raimondo has stated.
First, the global semiconductor industry cannot operate without the cooperation of the Chinese semiconductor industry. The Dutch lithography giant ASML has stated that if the U.S. forces it to stop selling its mainstream lithography equipment to mainland China, the global semiconductor supply chain will face disruption, and U.S. companies will also become victims. Currently, the concentration of semiconductor manufacturing in East Asia is not only a choice of the U.S. industry but also the most efficient way to allocate global resources.
Second, the U.S. government’s attempt to rebuild domestic semiconductor manufacturing may not align with the interests of all U.S. capital, and it may not even align with the interests of American workers. During Trump’s administration, there was an attempt to pressure the return of manufacturing to the U.S., but it is difficult to persuade ordinary people to work in the semiconductor manufacturing industry, which requires high-intensity work, and talent training cannot be completed in the short term.
“U.S. interference will always exist, but its specific effects are not as exaggerated as they seem,” said the aforementioned industry insider, noting that semiconductors play a crucial role in the entire national economy and industrial development, and the Chinese semiconductor industry should be prepared for long-term hard work and should not seek quick success.
“I believe that the semiconductor industry is not a competition between individuals or even between companies, but a competition between nations,” he pointed out, adding that domestic policies supporting the semiconductor industry still have a long way to go, “compared to the support for high-speed rail, photovoltaics, and other industries in the past, there are still many cards to play and much work to be done, and the future of China’s semiconductors is still full of hope.”
Source| Observer Network
