Tech war: China’s top memory chip maker carefully treads path to semiconductor self-sufficiency as US ponders trade sanctions
- Privately-held Yangtze Memory Technologies Co remains China’s top memory chip maker, despite escalating tensions between Beijing and Washington
- The company faces pressure amid reports that the US plans to ban sales of semiconductor-manufacturing gear to advanced memory chip makers in China
As such, YMTC finds itself leading the way for China’s semiconductor industry to cut reliance on imported technologies, while continuing to pursue innovation.
“YMTC is not a copycat with trailing-edge technology, like [how] many erroneously perceive Chinese semiconductor companies [to be],” Dylan Patel, chief analyst at Los Angeles-based SemiAnalysis, wrote in a newsletter last month. “They are building their own innovative and unique products.”
The memory chip maker, according to a Nikkei Asia report published in May 2021, had set up a task force of more than 800 people to review its supply chain, with the ultimate goal of replacing US suppliers. Although that report was subsequently denied by YMTC, it reflected how the company has become an integral part of the global semiconductor supply chain.
In October 2017, YMTC designed and manufactured China’s first 3D NAND flash memory wafer through its own research and development and international cooperation, according to the firm’s website. Its 3D NAND flash memory packaged chips are embedded in various storage devices as well as consumer and enterprise solid-state drives, which are widely used in mobile devices, personal computers, servers and various consumer electronics products.
YMTC has more than 10,000 employees worldwide, including 6,000 engineers involved in research and development activities. The company is looking to hire graduates to fill dozens of positions at its operations in Wuhan, Shanghai and Beijing, according to its latest recruitment post.
China is the world’s second-largest market for NAND flash products, making up more than 31 per cent of the global market, according to data from Minsheng Securities. YMTC, however, only had a 1 per cent share of the global memory chip market in 2020.
Samsung, Toshiba, Western Digital, Intel, Micron and SK Hynix controlled 95 per cent in the same period, according to Minsheng Securities. By 2025, it expected YMTC to increase its share to 6 per cent.
China’s memory chip champion YMTC stays mum amid threat of US sanctions
“YMTC’s chance to enter Apple’s supply chain as a key player of the Chinese memory industry has great symbolic significance for the industry and is a recognition of its technological prowess,” said Arisa Liu, a senior semiconductor research fellow at the Taiwan Institute of Economic Research.
That potential development, however, has reportedly raised eyebrows back in the US.
The possibility of the US expanding the scope of its trade sanctions to include YMTC is real, given the memory chip maker’s technological progress, according to Liu from the Taiwan Institute of Economic Research.
But Siva Manoharan, IP Research Group’s founder and managing partner, downplayed the significance of their teardown analysis in an emailed response to the South China Morning Post. He said the group just “supplied a picture of the chips found on the phone, nothing more – there is no evidence or opinion on the dates or sources of any chips on the phone or when the phone was manufactured”.
The NAND Flash memory chip market is currently “frosty”, according to a research note by TrendForce analyst Bryan Ao, who said inventories are at a “breaking point” and that chip makers are being forced to cut prices.
YMTC had previously planned to process a monthly capacity of 30,000 wafers by 2020, which would reach 1 million by 2030 after its three fabs reach full capacity in 2025.