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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
Tech

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
Semiconductors
Bloomberg
Bloomberg
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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
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.

Yangtze Memory has not set a target for domestic procurement, Zheng said, adding that it would be “unscientific” to do so.

It has been collaborating with chip firms from the U.S., Japan, South Korea and Europe on talent and technology and will continue working with these global companies, he said.

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, the latest iteration of storage used in smartphones and high-end computing.

Yangtze Memory Technologies Co’s headquarters and manufacturing complex are located in Wuhan, capital of central China’s Hubei province. Photo: Handout
China’s semiconductor industry is bracing for further sanctions from the Trump administration. Efforts by the White House to constrain the rise of China’s technology giants have already led to bans on exports of US technologies and equipment to Huawei Technologies, the world’s largest telecommunications equipment maker and China’s biggest smartphone maker.
The US should not be terrified by China’s growth, Zhao Weiguo, chairman of Yangtze Memory parent Tsinghua Unigroup Co, said last year.

Unigroup and other Tsinghua affiliates have pulled off a number of acquisitions over the years, including of RDA Microelectronics and Spreadtrum Communications, to strengthen their design capability, and signed partnership deals with global players including Western Digital Corp.

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