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Semiconductors
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China’s top memory chip maker can’t wean itself off US for now

  • Yangtze Memory Technologies Co currently gets more than 80 per cent of its chip manufacturing equipment from the US and Japan
  • The company has said it will invest US$22 billion in a facility in Wuhan that is by far China’s most advanced factory for 3D NAND flash memory chips

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Wuhan-based Yangtze Memory Technologies Co, which successfully designed and manufactured China’s first 3D NAND flash memory in 2017, introduced in April its 128-layer, 1.33-terabyte X2-6070 chip. Photo: Handout
Bloomberg
China’s top flash memory chip maker sees no easy way to replace US chip manufacturing equipment, underscoring how a further crackdown on the supply of American technology will devastate the local semiconductor industry.

Yangtze Memory Technologies Co currently gets more than 80 per cent of its equipment from the US and Japan, according to Zheng Jiuli, vice-president in charge of supply chain management. While some Chinese suppliers have made breakthroughs in areas including etching, cleaning and coating, there are not enough local alternatives to replace everything, he added.

“Long-term investments in innovation and R&D have led to technological advantages” at US and Japanese suppliers, Zheng said. “This is also the reason why their products are currently in the mainstream and are difficult to replace.”

The deficit of basic chip making equipment complicates Beijing’s ambitions to reduce its reliance on its geopolitical rival.

Yangtze Memory Technologies Co last year started mass production of its 64-layer, 256-gigabyte 3D NAND flash memory chips to meet industry demand for solid-state drive embedded storage. Photo: Handout
Yangtze Memory Technologies Co last year started mass production of its 64-layer, 256-gigabyte 3D NAND flash memory chips to meet industry demand for solid-state drive embedded storage. Photo: Handout
China has rolled out a number of measures to boost its domestic chip industry, including creating a US$29 billion semiconductor investment fund and Beijing is planning to provide broad support for so-called third-generation semiconductors in its next five-year plan, Bloomberg News reported last week.

Production of these chip sets, which are mainly made of materials such as silicon carbide and gallium nitride, only has limited exposure to US vendors, analysts at Citigroup have said.

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