Huawei, a Chinese company released Mate 60 Pro smart phone carrying a chip (advanced system-on-chip processor) manufactured by Semiconductor Manufacturing International Corporation, Shanghai. The smart phone has speeds in excess of 350 megabits per second. It is thus on par with Apple’s iPhones with 5G speeds.

There are restrictions on export of manufacturing tools that can turn out processors at 16 nm or below. China has not published specifications of the chip inside Mate 60 Pro. However, its performance points to a processor at 7nm or better.

Has China found a way to bypass the sanctions led by US? Has Chinese electronics found a way to circumvent the curbs? The US efforts focused on Chinese restricting Chinese abilities in semiconductor field to chips larger than 14nm, eight years behind the current technological frontier.

SMIC, China has already achieved 7 nm capability as per TechnoInsights on an earlier chip for Bitcoin mining (MinerVA7). It means the latest development is evolutionary. There is no reason for China to cheer up and for the US to get worried.

Older tools are capable of being used for such progress. They can make more advanced semiconductors. There is an approach called multi-patterning. Here silicon is exposed multiple times to light for marking the circuit design, instead of a single exposure. SMIC could achieve 7 nm by running this lithography step four times or more. Of course, there is increase in the number of tools required and costs. The whole manufacturing throughput slows down. However, the extra costs being marginal can be compensated by economising manufacturing process elsewhere.

Mate 60 Pro could have been powered by a new Kirin 9000 chip. Policy makers will have to consider whether equipment curbs do really work. The current restrictions may not prevent China from getting 5 nm. Of course, China will still trail behind the leaders by many years. And there is a limit to squeeze more out of old equipment. China will be stuck, while the rivals advance. And the US and allies have many other ways to tighten the sanctions. They can further add materials to the list.

SMIC has considerable finance (about $30 billion) for technological catch up. US-based groups who lobby for its electronics industry estimate the building up of 23 facilities for semiconductors on the mainland. It has investment estimated to be worth $100 billion. There is greater government support. Washington will have to do some hard thinking.