The Taiwanese chipmaker is halting crucial supplies to China, becoming one of the first companies to do so

After a patent application filed by Chinese technology giant Huawei Technologies Co. Ltd., Related to advanced semiconductor manufacturing, earlier this month a Chinese company specializing in some chipmaking products halted supplies to mainland China. Huawei’s patent was related to manufacturing chips via extreme ultraviolet (EUV) lithography. The patent led to speculation that China might be able to circumvent restrictions that prevent it from obtaining or building chips using the new technology. Now, Taiwan’s Gudeng Precision Industrial Co., which supplies equipment such as masks for EUV manufacturing, has suspended supplies to China, stating that this is not a suspension but a temporary delay.

Taiwan company hides shipments to China but still accepts new orders

The wafer manufacturing process, which uses infinite raw material inputs and products, involves printing tiny circuits onto a silicon wafer. This process uses a light source, the main advantage of EUV being its lower wavelength which results in easier printing of smaller circuits. By comparison, earlier technologies such as the DUV had to rely on several patterning attempts to achieve the same circle size as the EUV machine with fewer patterning attempts.

At the heart of this process is a mask that contains the patterns on which these circles are imprinted. These masks are placed below the light source and on top of the wafer, and once light has filtered through, they block unwanted light and enable fabrication of the wafer.

Gudeng Precision Industrial Co. is one of the largest pod providers of these masks in the world and has a dominant market share when it comes to EUV manufacturing. It is also one of TSMC’s largest suppliers of this essential equipment.

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Gudeng Precision Industrial Co., Ltd. EUV case. Photo: Gudeng

Because a single mask can be used for multiple foils, it must be carefully stored and transported between foil making machines. To ensure that delicate equipment is not damaged during storage and transportation, EUV masks are stored in capsules. Gudeng equipment is also certified by ASML, the only one who can manufacture EUV machines.

Gooding responded to media reports of the system’s discontinuation, and made it clear that it was temporary in nature. The company also confirmed that it continues to receive orders from China as well. This makes it one of the first consumer semiconductor manufacturers to cut off supplies to China after the US government stepped up efforts to block China’s access to advanced technologies for military use.

The company is one of the best manufacturers of EUV devices in the world, and apart from TSMC, it also provides products for both Intel and Samsung. Earlier in the year, Gudeng was optimistic about TSMC’s 3nm mass production, which he believes will see growth for the next year and a half. Its EUV pods are seeing high demand as transistor node size decreases, with advanced processes like 3nm using up to eight times as many pods as older 7nm processes.

It has also benefited from China’s strong pace of developing a domestic chip-making industry, and the primary products it offers to the mainland are standardized capsules (FOUPs). These are different from EUV capsules, and are used to store chips. In fact, the capsules move the wafer inside the wafer making machine to ensure that the external environment does not contaminate the product. Gudeng expects its Chinese revenue to grow by 40%, and the company is believed to control a similar percentage of the market in the country as well.

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