CHINESE PROGRESS IN THE PRODUCTION OF INTEGRATED CIRCUITS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T01058R000101080002-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 22, 2016
• Document Release Date: November 13, 2009
• Sequence Number: 2
• Publication Date: March 12, 1985
• Content Type: REPORT

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Washington. D. C. 20505
DIRECTORATE OF INTELLIGENCE
Chinese Progress in the Production of Integrated Circuits
Summary
One of Beijing's primary technology tasks is to
develop a modern microelectronics industry that will
enable China to produce for export as well as to
meet its domestic requirements for electronic
devices. Because many Chinese integrated circuits
are unreliable and inefficient, Beijing now imports
most electronic devices needed for key computers and
military projects.
China's present ability to produce integrated
circuits lags behind the West by about 10 years.
Devices are larger than their Western counterparts,
require more power, and operate more slowly.
Production problems include inadequate coordination
between research and production units, limited
availability of key pieces of quality-control and
test equipment, and shortages of qualified midlevel
engineers and managers.
To remedy these deficiencies, China has begun a
comprehensive reform of its R&D sector and an
ambitious import program involving both complete
production lines and key pieces of equipment. We
expect these efforts to yield some significant
This memorandum was produced byl lof the Office
of East Asian Analysis in response to a request from the Deputy
Assistant Secretary for Trade Development, Department of
Commerce. Questions and comments are welcome and may be
addressed to Chief, China Division,
EA M 85/10047
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results over the next few years. For Western firms
attempting to sell to China's electronics sector,
China's expansion plans have opened up significant
sales opportunities.
Introduction
China's highest technological priority is to establish a
modern semiconductor industry capable of supporting an expanded
computer development and manufacturing program. By 1990 the
Chinese hope to develop a capability in advanced microelectronics
equal to the United States' capability in the early 1980s.
China's objectives are twofold:
-- To increase the sophistication of the devices
produced domestically for use in advanced computers
and in military systems.
-- To boost the supply of medium-level electronic
components available for use in dual-use computers
and in consumer goods.
In the longer term, Beijing intends to become a major
exporter of integrated circuits and a strong competitor in the
international marketplace for sophisticated electronic
components. To accomplish these objectives, China has shifted
its electronics modernization strategy from one emphasizing self-
reliance to one of importing advanced technology and equipment
from the West and Japan to speed the pace of development and to
Growth of the Industry
China's integrated circuit industry had its beginning in
early 1956, when the leadership formed a national committee to
develop plans for the rapid development of semiconductor
devices. During the late 1950s, China produced prototype
semiconductor diodes and transistors. In the early 1960s, it
began to develop a production capability for discrete
semiconductor components, and by 1965 at least 34 factories and
research institutes were making semiconductor materials and
fabricating semiconductor devices.
Despite dislocations caused by the Cultural Revolution, the
electronics sector continued to grow between 1966 and 1976,
chiefly because of its importance to strategic weapons
development. As part of a nationwide policy of dispersing
defense-related production to shield indust-'y from enemy attack,
China during this period constructed additional semiconductor
research and production facilities in remote areas of China. As
a result of this effort, four major electronic research and
production centers were established in China's interior (Gansu,
Sichuan, Yunnan and Guizhou Provinces), in addition to the
electronic production centers in Beijing, Tianjin, Shanghai, and
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several coastal provinces. These interior production plants are
relatively sophisticated and continue to produce primarily for
military customers. By mid-1971, the number of Chinese plants
known to be engaged in series, batch, or experimental production
of semiconductor components had grown to 82--more than double the
number identified in 1965.
In the late 1970s, China began a new push to acquire Western
technology for the production of semiconductors and other
sophisticated electronic goods. One major new production line
for integrated circuits was planned during this period, a
facility at the Jiangnan Radio Equipment and Materials Plant in
Wuxi, Jiangsu Province. Production at the new plant has been
held up by difficulties in obtaining US export licenses for
needed new equipment, the need to refurbish some of the used
equipment, and legal problems involving the US trade agent. When
completed the Wuxi plant will for a time be China's largest
integrated circuit factory, with a capacity of over 26 million
linear integrated circuits per year.
With the backing of the Leading Group for the Invigoration
of the Electronics Industry, formed in 1982 and renamed and
reconstituted in 1984, other facilities of similar size are also
planned for Tianjin, Shanghai, Beijing, Shaoxing, Changsha and
several other cities. Combined output for these major projects
could reach several hundr d million integrated circuits per
year.
Current Capabilities...
China's semiconductor industry today reportedly consists of
more than 500 facilities, 200 of which are involved in some
aspect of integrated circuit development and manufacture. The
Chinese claim that the Ministry of Electronics Industry alone
controls at least 140 factories, which produce an estimated 40
million integrated circuits a year. In addition, there are
electronics research and manufacturing enterprises operated by
the Ministry of Astronautics Industry, the Ministry of Posts and
Telecommunications, the Ministry of Machine Building Industry,
the Ministry of Light Industry, the Ministry of Public Security,
and the Chinese Academy of Sciences.
At present, China manufactures nearly 1,000 types of
integrated circuits. Most are small-scale-integration (SSI) or
medium-scale-integration (MSI) devices. More sophisticated
devices, such as 16K random-access-memory (RAM) units, and 16K
eraseable-programmable-read-only-memory (EPROM) circuits, and 8-
and 16-bit microprocessors are also being manufactured, but in
limited quantities and with low production yields.
China's ability to produce integrated circuits in commercial
quantities continues to lag behind the US and Japan by five to 10
years.
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Table 1
Type of Memory IC
Year First Commercially Available
US
Japan
China
1K
DRAM
1970
1972
1978
4K
DRAM
1974
1975
1981
16K
DRAM
1976
1977
1985
(est)
64K
DRAM
1980
1980
1989
(est)
256K DRAM 1984
1983
1992
(est)
China's domestic requirements for microprocessors and advanced
logic and memory devices are still being met primarily by imports
from Japan and the US.
China's production capabilities in seven major categories of
integrated circuits are described below:
TTL Circuits. Transistor-transistor-logic circuits
constitute about 50 percent of China's total integrated circuit
production. China produces five series of TTL circuits, all
based on the Texas Instruments SN74/54 series. Some are produced
to military specifications, able to function in temperatures
ranging from -55 to +125? C. The Chinese claim that all TTL
logic circuits being produced are directly interchangeable with
their US-produced counterparts. China is particularly proud of
its low-power Schottky (LSTTL) devices, 100 varieties of which
are produced--most to military standards--by an integrated
circuit plant in China's interior. This plant, the Tianguang
Electrical Industry Factory, reportedly supplied some of the
circuitry used in China's Galaxy supercomputer. The Tianguang
plant of Gansu Province is benefitting from the modernization of
its sister plant, the Tianguang factory of Shaoxing, Zhejiang
ECL Circuits. China's emitter-coupled-logic circuits are
modeled on the Motorola MC10100 and MC10500 se,?ies. These ultra
high speed circuits, again produced to military specifications,
are also made by Tianguang. In addition, China claims to use
these circuits in missile guidance systems, satellite
communications equipment, and microwave measurement devices.
General Purpose MOS Logic Circuits. Because of the
relatively slow speed and high power consumption of PMOS
(positive-channel metal-oxide-semiconductor) devices, China is
gradually replacing them with CMOS (complementary MOS)
technology. NMOS (negative-channel MOS) technology continues to
be used extensively in Chinese microprocessors and memory
devices. Mastering the complex CMOS manufacturing process has
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been more difficult, but China reportedly produces more than 70
varieties of CMOS circuits, including microprocessors,
operational amplifiers, voltage comparators, and digital/analog
converters. In 1982, China's domestic sales of CMOS circuits
Dedicated Circuits. Chinese versions of these circuits--
used in televisions, radios, watches, and other consumer goods--
are mainly based on Japanese devices made by Sanyo, Toshiba,
Hitachi, Matsushita, NEC, and others. In recent years, China has
purchased equipment for a large number of production lines
designed to produce devices for consumer electronics. Many
contain refurbished equipment purchased from Japanese or US IC
producers, rather than state-of-the-art production technology.
Some of the production lines, such as the one at the Jiangnan
Radio Equipment and Materials Corporation, may be capable of
producing more advanced general purpose integrated circuits than
required for color televisions--such as 8-bit microprocessors and
16K memory devices.
Microprocessors. China produces 1-bit CMOS and 4-, 8- and
16-bit NMOS microprocessors. China's 8-bit microprocessors are
modeled on Intel's 8080 and Motorola's 6800 series. China claims
to be producing single-chip 8-bit processors in at least four
different factories, although the chip is most likely
significantly larger than its Western counterpart.
In early 1984, China claimed to have begun small-batch
production of 16-bit microprocessors at an interior factory
subordinate to the Ministry of Astronautics Industry, the Lishan
Microelectronics Corporation of Shaanxi Province. The 16-bit
processor can be used in real-time control systems in demanding
environments; it is designed to operate for long hours in a wide
range of temperatures and is resistant to moisture and
Memory Devices. In 1982, China announced that the
Semiconductor Research Institute of the Chinese Academy of
Sciences in Beijing had developed a 16K DRAM (dynamic-random-
access-memory) chip. At the same time, Beijing made public its
ability to produce 4K SRAMs (static-random-access-memory devices)
and 8K EPROMs. Since then, the Chinese have developed 16K
EPROMs. At least a dozen factories plan to produce 16K DRAM
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devices and are currently negotiating for the transfer of foreign
technology and equipment.
China reportedly began research on 64K DRAM integrated
circuits in 1981 and claims to have produced them in small
quantities in the Shan hai area by 1984.
A number of institutes are now working to develop very-
large-scale-integrated circuit (VLSI) technology. In 1983 and
1984, several Chinese facilities attempted to obtain equipment
and information suitable for the production of 256K DRAM
Even if China gains access to Western 256K DRAM
production technology, the Chinese will probably not produce a
prototype 256K DRAM before the end of this decade. Production
capability will require several additional years.
..and Limitations
In laboratory settings, lack of equipment, rather than
expertise, is largely responsible for China's delay in producing
advanced prototypes. Even with imported high-purity chemicals
and materials, the absence of computer-aided-design (CAD) systems
and state-of-the-art processing equipment prevents the Chinese
from producing VLSIs on the order of a 256K DRAM.
China's development of prototype 64K and 256K DRAM devices
almost certainly requires the acquisition of equipment that will
enable the Chinese to pack circuits more densely by using
narrower design rules. The equipment generally available in
Chinese factories permits the Chinese to produce devices with
line widths of 5 to 10 microns, and the Chinese claim to have
achieved a 2-micron capability in one institute. In contrast,
Western producers routinely use 2-micron geometries and have made
substantial progress toward developing a sub-micron capability.
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Another limitation of China's semiconductor industry is the
long lead-time required before a developed prototype device moves
into factory production. The gap between prototype and
commercial production of memory devices, for example, ranges from
two to four y^ars and appears to have increased over the last
decade, as the sophistication of the devices has risen. In the
West, a one or two year gap between prototype development and
commercial production--slightly longer for 256K DRAM devices--is
Table 2
China's Development and Production of Memory Devices
Type of IC Year Developed Year Produced in
Commercial Quantities
1K DRAM
4K DRAM
16K DRAM
64K DRAM
1976
1979
1981
1984
1978
1981
1985 (est)
1989 (est)
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Removing the Obstacles
China is taking steps to improve its ability to develop
advanced devices on a laboratory scale as well as to improve
production capabilities at its electronics factories. To remove
the institutional barriers to advanced electronics production,
Beijing is now embarked on a major reform of its entire
scientific and technological system. Its aim is to bridge the gap
between research findings and commercial production and to
improve the flow of technology between factories. To foster the
internal transfer of technology, the Chinese leadership is
encouraging the mobility of technical personnel, creating
financial incentives for institutes to work closely with
factories on the development of new products and production
techniques, placing a large number of institutes formerly
controlled by the Chinese Academy of Sciences under the direct
control of industrial ministries, and forming regional
corporations, composed of factories and institutes engaged in
semiconductor research and production, in major cities.
To improve material conditions in laboratories and
factories, Beijing has embarked on an ambitious program of
equipment imports, factory renovation, and investment in key
electronics production projects. Because China's goals involve
both rapid expansion in the quantity of electronic devices
produced for civilian applications and rapid advances in the
sophistication of the circuitry produced for military uses,
Beijing is using a variety of means to obtain foreign technology
and equipment for this sector:
-- Cooperative production involving firms from the
United States, Japan, and Western Europe. Although
most of the emphasis on cooperative production in the
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electronics sector is centered on joint venture
investment, the Chinese are also promoting
compensation trade and kit assembly arrangements.
-- Purchases of turnkey plants and design technology for
the production of advanced electronic devices.
Although contracts for complete production lines have
declined overall since 1978, the Chinese now appear
more willing to purchase complete sets of equipment
in the area of microelectronics.
-- Purchases of selected pieces of production and test
equipment to modernize existing plants, improve
production yields, and produce more sophisticated
devices, such as large-scale and very-large-scale-
integrated circuits.
-- Purchases of used pieces of equipment as well as
refurbished complete production lines.
Although it is difficult to generalize about the method
Chinese factories most often select, key projects--frequently
related to the production of components to be used in military
systems--often involve new, rather than refurbished, equipment.
Military-related projects are unlikely to involve any form of
cooperative production that would require the presence of foreign
managers or advisers. Joint venture projects, imports of used
equipment, and purchases of complete production lines are the
methods often chosen to boost the production of components to be
used in consumer goods or general-purpose computers.
Among the individual pieces of wafer fabrication equipment
China most actively seeks to import are:
-- Microprocessor-controlled Czochralski furnaces for
growing low-defect single-crystal silicon ingots.
-- Molecular-beam epitaxial reactors for growth of a
layer of pure silicon (or gallium arsenide) on wafer
surfaces.
-- Computer-aided design software, pattern generators
and compilers, and graphics systems for developing
mask designs.
-- Electron beam lithographic equipment for producing
masks.
-- Projection mask alignment systems for use in
photolithography.
-- X-ray lithographic equipment.
-- Ion implanters.
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-- Plasma etching reactors.
-- Magnetron sputtering equipment.
-- Wafer probers for circuit testing.
-- Automated gold wire bonding equipment.
-- Equipment for producing multilayer printed circuit
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SUBJECT: Chinese Progress in the Production of Integrated
Circuits
National Security Council
1 - David Laux, Senior Staff Member for China, Taiwan and Hong
Kong, Rm 302, EOB
Department of State
3 - Donald Anderson, Director, Office of China Affairs, Rm 4318
1 - Teresa Jones, Bureau of Intelligence and Research, Rm 6524A
1 - Larry Roeder, Office of East-West Trade, Rm 3815
1 - Chris Clarke, Bureau of Intelligence and Research, Rm 8840
Department of Defense
1 - Richard Clark, FTD/TQTR, Wright Patterson AFB Ohio, 45433
1 - Garry E. Moore, DIAC, Rm C6186
Department of Treasury
1 - Douglas Mulholland, Deputy Assistant to the Secretary for
National Security, Rm 4326, Main Treasury
Department of Commerce
5 - David K. Diebold, Deputy Assistant Secretary for Trade
Development, Rm 3899
1 - Roger Severance, Acting Deputy Assistant Secretary for East
Asia and Pacific, Rm 2317
1 - John Boidock, Director, Office of Export Administration,
Rm 1097
2 - Christine Lucyk, Office of PRC and Hong Kong, Rm 2317
Central Intelligence Agency
1 - Executive Director (Rm 7E12)
1 - DDI (Rm 7E44)
1 - NIO/EA (Rm 7E62)
1 - NIO/S&T (Rm 5G0O-)
1 - AG/NIC Attn:
5 - CPAS/IMC/CB (Rm 7GO7)
1 - PDB Staff (Rm 7F30)
1 - CPAS/ILS (Rm 7G50)
1 - FBIS/NEAD/CE
2 - OSWR/STD/SB (Rm
1 - OSWR/TTAC/TAG (Rm 6C43)
(Rm 7BO7)
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SUBJECT: Chinese Progress in the Production of Integrated
Circuits
Distribution: (continued)
1 - OGI/ECD/TW (Rm 3G46)
1 - OGI/TID/TEC (Rm 3G22)
1 - D/OEA (Rm 4F18)
1 - Research Director/OEA (Rm 4G48)
2 - C/China Division (Rm 4G32)
1 - OEA/China/DEF
1 - OEA/China/DOM
1 - OEA/China/DEV
1 - OEA/China/FOR
1 - DDO/EA (Rm 5D54)
1 - DDO/EA (Rm 5D38)
1 - DDO/NC
2 - OCR/ISG (Rm 1
1 - C/PES (Rm 7F24)
1 - C/EA J (Rm 7E10
1 - C/D0/PPS (3D01)
DDI/OEA/China/DEV/
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