If Russia Can’t Have Chips No One Will? Russian Inputs Are Critical to Global Semiconductors Supply Chain
"Such steps will leave almost the entire world without microelectronics."
Machine translated from Russian.
The world’s largest manufacturers of computer processors and semiconductors announced their accession to sanctions against Russia. Processors for user PCs, servers and data storage systems will not be supplied to our country. Loud words inspire pessimism in the average person. In practice, such steps will leave almost the entire world without microelectronics.
Sine qua non
Talking about sanctions against Russian microelectronics is impossible outside of talking about global microelectronics. Threats to stop deliveries to Russia amd and Intel, as well as stopping the production of Russian “Baikals” and “Elbrus” at the Taiwanese plant TSMC look like an information attack. The reality of the implementation of these plans in the conditions prevailing in the modern microprocessor industry is close to zero.
The fact is that our country today accounts for 80 percent of the market of sapphire substrates – thin plates made of artificial stone, which are used in opto- and microelectronics to build up layers of various materials, for example, silicon. They are used in every processor in the world – AMD and Intel are no exception.
Our position is even stronger in the special chemistry of etching chips using ultra-pure components. Russia accounts for 100 percent of the world’s supply of various rare earths used for these purposes.
The ban on finished products for Russia will result in a retaliatory ban on the supply of production components and will cause an acute shortage of processors for the whole world. Compared to him, the situation with supply disruptions at the end of 2021 will seem relatively easy.
It is necessary to perceive such statements only as part of the information war – propaganda rarely takes into account the integration processes of the global economy.
Russia’s integration into the global IT industry began in the heyday of the USSR, in the 1970s. It will not be possible to dramatically replace us with a resource of alternative locations for the production of substrates, and it will not be possible to replace rare earths from Russia in any way.
There are objective reasons for this. To ensure the necessary quality of sapphire substrates, the plant needs to enter the so-called “especially clean mode”. It involves about thirty years of continuous production in compliance with all the subtleties of the technological process.
In addition, it is possible to develop such plants only in conditions of almost zero seismic activity. The slightest fluctuation of the earth’s crust (1-2 points) will lead to the fact that absolutely all production will need to be restarted from scratch.
That is why the products of similar enterprises in California or in the same Taiwan – and these are seismically active zones – in terms of quality and volume are noticeably inferior to the level required in the industry.
Road to the East
But let’s assume that the side imposing sanctions still has a trump card up its sleeve, and the threat of disconnection from supplies from Russia is calculated. In this case, the scenario “for every firefighter” should be in our country. And we have it.
It is known that in the last few months before 2022, extensive consultations were held on the possible exclusion of the Taiwanese TSMC plant from domestic production chains. This is the industry’s leading production with revenues of about $ 48 billion and with well-established 7- and 5-nm technological processes and the production of chips according to the standards of 3 and 2 nm.
TSMC has approximately 54 percent of the global market, the second closest pursuer (Samsung) has 17 percent. The rest of the volume is distributed between GlobalFoundries, Semiconductor Manufacturing International Corporation (SMIC), UMC and other niche, although quite large in these niches, players.
So, the most obvious option, taking into account the specifics of the moment for Russia, is mainland China, where SMIC operates, and the production of its own equipment for the production of processors is developing at the AMEC factory, whose equipment allows processing 300-mm silicon substrates used for a wide range of technological processes from 65 nm to 5 nm. So far, the volume of finished products is significantly inferior to the resources of TSMC, but it is a matter of time.
Such a way can not be called simple: the transition to the AMEC enterprise will require a set of works on adaptation to the realities of a particular factory, changes in templates, documentation, etc. However, this is not a radical change in the entire existing process, and when the plan is activated, it will take a year and a half.
Taiwan Question and Chinese Response
However, you can “cut” the path and get access to the established production processes of TSMC. To do this, China must resolve the Taiwan issue..
Beijing has never recognized the island’s independence. The desire to reunite with the lost territory does not stop him from the presence of an American military base in Taiwan. However, in the event of attempts to seize the island, the Taiwanese military is obliged to destroy TSMC with a missile strike. With the implementation of this plan, the global chip industry comes to an end: Intel and Samsung remain to cover the needs for processors in the local US market.
China has been preparing for a solution to the Taiwan issue for a long time, and the military scenario is far from the only one. Loyal political forces were nurtured on the island, a business focused on the PRC developed – the economy of Taiwan since the early 2000s has seriously reoriented itself with an eye to the market of the elder mainland brother. China can implement reunification within the framework of the concept of “one language – one people”, taking into account the mass of kinship ties between the two regions. It is quite possible to carry out such integration from the point of view of ideology and propaganda.
In addition to China, India has the status of a partner with huge potential in IT in general and microelectronics in particular.
After the termination of the colonial model of cooperation with the British, India quickly began to grow and for some time actively moved towards the USSR. This made it possible to create a serious education system in this country, which absorbed all the best from the British and Soviet systems.
The country is interested in entering the global market as an independent player or partner of one of the leading players, and it has all the necessary basic elements, especially human resources, for this. It is enough to pay attention to the number of Indians in top management in IT giants and start-ups, including in the field of microelectronics. The synergy of cooperation with Russia in this area seems very promising.
In general, India’s agenda today can be interpreted as a demonstration of the fundamental possibility of getting out of unequal financial relations with global leaders within the framework of the Western model of development. Under these conditions, the alliance with Russia can be not only quite real, but also very productive.
The Third Way: Own Unique Process Technology
In addition to purely geographical solutions to the problem, there is also a way to create a completely new technological approach to the production of semiconductors.
It consists in abandoning the use of silicon and replacing it with gallium arsenide. This is a semiconductor material from the class of compounds AIII BV – a dark gray crystal, which is actively used in infrared optics, as well as in opto- and microelectronics. The fundamental difference from silicon is the ability to build three-dimensional chip architectures instead of two-dimensional printing of wafers, which allows you to implement a different approach to creating processors.
The team developing the project was originally going to launch a startup in the UK. But nothing happened because of the pressure of Intel and AMD, which did not need such competition at the level of an alternative process technology. Upon returning to Russia in 2016, it was possible to find a use for the developments. The production of such solutions is established today in Perm for the needs of the Ministry of Defense of the Russian Federation. However, the technology has all the possibilities for use in civilian tasks.
The advantage of such a development scenario is that there are simply no analogues to this production in the world. This is its own market: “blue ocean”, multiplied by “green field”. The only question is state support and political will.
Research in the direction of the civilian potential of gallium arsenide is conducted quite intensively. Of course, there is no need to wait for an instant result. But such a path can become an element of a combined approach to solving the problem: traditional silicon solutions based on a two-dimensional process technology based on cooperation with China plus know-how on gallium arsenide.
Source: Global Affairs
— UPDATE —
I wrote to the Asianometry guy on YouTube who is a huge egghead on semiconductors asking if there is truth to these Russian claims and this was his reply:
“Sapphire substrates and silicon on sapphire technologies exist but so far as I know it’s a science project that has little commercial value.
Without knowing what the various rare earths the article mentions it’s not possible to do a video on it.
In general I found this article to be more wishful thinking than actual strategy. “