The China International Import Expo (CIIE) 2022 was held in Shanghai from Nov. 5-10, with primary chip manufacturing tool makers such as ASML, Lam Research, Canon, and Nikon among those in attendance.
The presence of the latter two was especially significant this year. ASML, a vendor for the most critical chipmaking equipment photolithography, has stopped serving Chinese clients due to American engineers being unable to work for advanced Chinese chip houses without a license under the US’s new chip export control measures released on Oct. 7. Although ASML dominates the photolithography market with a 90% share, according to Reuters, traditional Japanese optical giants Canon and Nikon are increasingly fighting for a foothold in the sector – and now have an opportunity to make in-roads in the Chinese market.
Canon entered China in the semiconductor manufacturing tools business in the 1980s, shipping photolithography and other chipmaking tools to local clients. Today, Canon provides equipment to major Chinese firms including SMIC, YMTC, and BOE, according to the firm’s brochure at CIIE.
In a group interview at the expo on Nov. 7, Akira Makino, chairman and president of Canon Optical Industrial Equipment (Shanghai) Inc., talked about the company’s lithography equipment and his views on the Chinese market. He also spoke of his optimism despite the recent downturn in consumer markets.
Below are selected highlights from the interview relevant to the Chinese market. The text has been translated, condensed, and edited for clarity.
On Canon’s competitive advantages
The most advanced equipment we have built in mass volume is krypton fluoride (KrF) lithography, the wavelength of which is 248nm. The minimum linewidth it can cope with is 90nm.
Chipmaking can require multiple layers and the process is quite long, but not all layers need the most dedicated equipment. For these “rough layers,” our KrF photolithography could handle the work. We are also working on some new equipment, thought this is not yet ready for mass production.
From the technique perspective, our product is fundamentally different to our major rivals in pattern making. Nanoimprint lithography (NIL), the technology we contribute to, is expected to reduce production costs as extreme ultraviolet lithography (EUV) costs are presently quite high. If we manage to get the equipment ready for mass production, it will be revolutionary, largely reducing the spending on advanced chipmaking.
Secondly, our equipment is overwhelmingly more power efficient compared to EUV, another big cost advantage.
Finally, nano-printed patterns are printed once for each layer, unlike traditional lithography, which uses complex processes such as self-aligned double patterning and self-aligned quadruple patterning (SADP/SAQP), with which a single layer of patterns may require more than two exposures, so we think there can also be a productivity advantage.
On sales of Canon lithography in China
Specific sales numbers and the unit amount that our clients possess are classified. But according to the publicly available data, the Chinese market became Canon’s largest market in 2020. Of course, this is not only the case Canon; for many semiconductor manufacturers, China is likely to be their biggest market.
Relatively speaking, our flat panel display (FPD) lithography and display panel manufacturing industries are concentrated in Asia. In this region, China’s share is the highest: China has contributed the largest share of Canon FPD business in FPD lithography equipment and OLED display manufacturing equipment.
On the Chinese semiconductor market’s development in the next five years
For Canon, relationships with our customers and partners are of great importance to us. I have been in charge of the lithography business in China for 17 or 18 years. During this period, I have built good partnerships with customers in China. Some of them are domestic firms and others are from regions like Korea, Europe, and the US.
Of course, there are many factors that may not be controlled by enterprises or individuals. But for Canon and I personally, we have always adhered to the policy of “the relationship with clients is the most important.” We will continue to provide quality products and services to our clients and contribute to their growth in the future.
I believe that the [Chinese] market will definitely grow in the next five years, no matter whether it’s in semiconductors or fields related to displays. The display panel market has seen a downturn as smartphone sales are less promising, but such declines are relative to an over-performance last year. And generally speaking, I don’t think the growth trend is going to change.
There is a characteristic of the semiconductor market – customers hear more information about its application in CPU and storage cards, but semiconductors actually have broad applications, for example in sensors, power control, and telecom devices. And new applications keep emerging. The variety of semiconductors and broad range of applications is a potential growth point.
Another point is that China has its own potential. China has a large population, which makes it a large market and it is still in a developing phase, so the consumption capability is growing – people can afford mid- and high-end products.
So there are two aspects: first, China has a lot of potential in its own equipment manufacturing; second, there is a strong consumption capacity in the market. For us, our perception is that this market will keep growing. As for recent trends, we believe they are just some adjustments along the way.