The founder of SMIC believes that it is a "misunderstanding" that chips must reach 3nm or 2nm to succeed.

Zhang Rujing, founder of China's largest semiconductor company Semiconductor Manufacturing International Corporation (SMIC), said in a latest interview that it is a misunderstanding to believe that to be successful in the semiconductor industry, you must be able to manufacture 3nm or 2nm chips. He believes that targeting specific market segments is a more important development direction.

TSMC's success in the semiconductor industry is largely due to its relentless focus on advanced processes and its ability to achieve stable mass production in record time, which has led to the establishment of long-term partnerships with trillion-dollar companies such as Apple and Nvidia. Although mass production of 3nm and 2nm wafers is undoubtedly a huge achievement, Zhang Rujing does not believe that these achievements are the only criteria for success.

Zhang Rujing emphasized, "Many people think that the competition in the semiconductor industry is a competition of advanced processes, and success can only be considered if it reaches 3nm or 2nm. This is actually a misunderstanding." He pointed out that advanced processes account for less than 20% of the entire market, while more than 80% of demand comes from mature processes. The founder of China's largest semiconductor manufacturer said that those market segments monopolized by overseas companies are ideal targets for domestic manufacturers. With a little effort, these chip manufacturing companies can achieve breakthroughs.

Zhang Rujing believes that priority setting is crucial and should start from solving specific problems. He said: "We don't need to do everything, we need to have priorities. For example, we can achieve excellence in a specific segment and solve a bottleneck problem, which is a huge contribution to the industry. Rather than gathering on popular tracks for homogeneous competition, it is better to focus on cultivating the missing links and market segments of the domestic semiconductor industry. This is a more pragmatic and valuable path to breakthrough."

In view of the accelerated growth of the artificial intelligence chip industry, Zhang Rujing also commented that the industry is currently paying too much attention to the field of cloud computing, while distributed artificial intelligence has been largely ignored. He found that this huge gap resulted in unmet needs for scenario-based hardware. Zhang Rujing advises AI startups currently focused on burning cash to compete with large companies to avoid this trajectory and instead follow a different path involving scenario-based applications.

Due to the lack of advanced extreme ultraviolet lithography (EUV) equipment necessary to produce 5nm and below process wafers, SMIC has been at a disadvantage in competition with manufacturers such as TSMC and Samsung. SMIC is still using older deep ultraviolet lithography (DUV) equipment, with process capabilities limited to 7nm. But judging from Zhang Rujing’s view on market segment opportunities, the manufacturer’s mature process nodes may be able to play a role in different markets.