'China's 4F² shock': US EUV export controls are slowly running out of time

The semiconductor industry is interpreting CXMT's surprise announcement of its next-generation server DRAM using 4F² (4F-squared) cell architecture as a reflection of China's struggle to advance without access to extreme ultraviolet lithography equipment.

"Korean companies can use EUV equipment to draw ultra-fine circuits without restriction, so they have no need for 4F²," said Jeon Byung-seo, director of the China Economy and Finance Research Institute. "Chinese companies cannot draw fine circuits without EUV equipment, so they are looking for a breakthrough through 4F²."

Lithography equipment is used in semiconductor manufacturing to etch circuit patterns onto wafers using light. Dutch firm ASML is the world's sole producer of EUV lithography machines.

Narrower circuit line widths allow more circuits to be drawn on a single wafer, increasing the number of chips that can be produced, while also improving processing speed and power efficiency.

China, however, has struggled to keep pace in the chip miniaturization race after US export controls on advanced semiconductor manufacturing equipment cut off its access to such tools.

As an alternative, China's semiconductor industry has been searching for workarounds that allow technological advancement without EUV equipment — and the newly announced 4F² architecture is the most prominent example of that effort.

Without a single EUV machine, China is mounting an all-out effort to increase transistor density and close the gap with Samsung Electronics and SK hynix. CXMT has laid out a blueprint to compete in the next-generation DRAM race by modifying its cell structure through 4F², an approach that sidesteps the need for EUV entirely.

While some observers rushed to declare that CXMT had leapfrogged Samsung Electronics and SK hynix with the 4F² announcement, others say the more significant takeaway is that China has found a way to circumvent US controls on EUV technology.

Kwon Seok-jun, associate dean of the College of Engineering at Sungkyunkwan University, wrote on social media that the CXMT announcement signals that "the time bought by the US government's sanctions on China's semiconductor industry since 2019 is gradually running out," adding that "the effective lifespan of US EUV export controls is nearly over."

He went on to say that "CXMT's roadmap, released at this juncture, is an important benchmark for gauging whether the fundamental dynamics of the market are about to change."

Analysts say that because the 4F² process is more technically demanding than conventional approaches, who can master it fastest will become a key battleground in the global memory chip industry going forward.

Kim Hyung-jun, director of the Next-Generation Intelligence Semiconductor Project and an emeritus professor at Seoul National University, said the feature size in CXMT's current 4F² production is still large, which inevitably increases the overall chip size. "Because CXMT cannot use EUV equipment either, its performance falls short of the 6F² chips that Samsung Electronics and SK hynix are making today," he said.

Lee Jong-wook, a team leader at Samsung Securities, said overcoming leakage current and securing mass-production viability are the critical challenges for 4F². "The actual impact on the three incumbent memory chip makers should be assessed by factoring in CXMT's production yield, customer qualification and shipment volume," he said.

Meanwhile, CXMT is reported to hold more than 300 patents related to 4F², raising concerns that as it accelerates development and works through trial and error, its process know-how could become increasingly sophisticated.

Analysts note that patent disputes over next-generation server DRAM could emerge with CXMT down the line — much as Samsung Electronics licensed YMTC's proprietary Xtacking stacking technology for use in its own NAND flash products.