Can BYD develop 7nm chips and 7nm mask aligner replace Foxconn?

BYD can seize Foxconn's market, even if it does not rule out being replaced in the future, but this has nothing to do with the research and development of 7NM chips and mask aligner.

Many people confuse Foxconn with TSMC. TSMC is a company that produces chips. At present, TSMC is the world's largest chip wafer foundry and the most technologically advanced chip manufacturer. Now it can produce 5-nanometer chips and is developing 3-nanometer chips, including high-end chips from companies such as Apple, Qualcomm and Huawei.

Foxconn is just a foundry, producing mobile phone assembly. Although Foxconn saw the prospect of the chip industry and the great potential of the chip in the future, what Foxconn did was only the processing and assembly of thousands of parts of mobile phones, but it did not have the ability to design chips or OEM chips.

BYD, a domestic automobile company, has vigorously developed new energy vehicles in recent years, and has also become a leading enterprise in lithium battery business. There are also BYD electronics, OEM mobile phones and various structural parts. In this part of the business, BYD can compete with Foxconn, and besides BYD, it is also growing in Luxshare, so there is no truly irreplaceable company like Foxconn, and it is not impossible to be replaced.

But this has nothing to do with the 7NM chip. BYD has no chip design capability or chip foundry capability. It's just a foundry. The largest chip design company in China is Huawei Hisilicon, and the largest wafer foundry company is SMIC. SMIC just mass-produced 14nm last year, and now it can only be put into trial production at 7NM. The gap with TSMC is still obvious. If SMIC is restricted, it cannot produce chips for Huawei.

It took decades for SMIC, which is mainly engaged in semiconductor business, to develop to its present level. If BYD wants to re-enter the semiconductor field and immediately start developing 7-nanometer chips, it is impossible to catch up with TSMC in the short term. And even if BYD is a foundry, it will catch up with SMIC as quickly as possible and develop a 7NM process, while BYD does not have a high-end EUV mask aligner for production.

At present, the high-end EUV mask aligner is produced by Dutch ASML company, including TSMC, and it is unable to produce high-end mask aligner. TSMC and Samsung both bought mask aligner from ASML. This is because mask aligner is the crystallization of many countries in the world and consists of tens of thousands of parts. It is difficult to directly produce high-end EUV mask aligner by a single company. The most advanced mask aligner manufacturer in China is Shanghai Microelectronics. After nearly 20 years, only 70NM mask aligner can be produced.

Therefore, it is not impossible for BYD to develop 7NM chips and mask aligner, but it needs huge capital investment and long-term research accumulation. BYD has other businesses, so it is impossible to put all its resources into the semiconductor industry. In order to realize the all-round development of the semiconductor industry in China, it is necessary for all companies in the whole industry chain to cooperate with the Chinese Academy of Sciences and other relevant scientific research institutes to promote the chip industry to achieve autonomy as soon as possible.