China’s 5nm chip capability deepens Western concern

Significance

This level of sophistication is not the most advanced on the market: Apple’s M3 chips, as well as the A17 powering the most recent version of the iPhone, use 3nm chips.

Impacts

• SMIC will have to improve yield and reduce costs in order for its chips to serve the Chinese domestic consumer market.
• The full effect of US semiconductor sanctions is only now starting to bite but Washington could tighten the restrictions still further.
• US-China tech rivalry increasingly looms over the global EV market due to the latter’s use of semiconductors.