Chinese chipmaker Yangtze Memory Technologies Corp (YMTC) plans to use domestic equipment to make advanced flash memory products after it was blacklisted from U.S. trade last year, sources say. industry.
If successful, the strategy would represent a breakthrough in China’s efforts to become self-sufficient in semiconductor production after the country was denied access to advanced chipmaking tools due to fears of Washington that the technology does not end up in the hands of the Chinese military.
Last year, Wuhan-based YMTC was on track to challenge memory chip leaders Samsung Electronics, SK Hynix and Micron Technology with its flagship X3-9070 232-layer 3D NAND flash chip, but its production outlook mass have been questioned after U.S. equipment suppliers KLA and Lam Research had to halt sales and services to YMTC in accordance with updated export controls from Washington.
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Sources from China’s chip equipment industry, who declined to be named due to the sensitivity of the issue, told the South China Morning Post that YMTC has increased its efforts to work with suppliers. Chinese to help manufacture its chips based on the Xtacking 3.0 architecture, and that progress has been made in a top-secret project codenamed Wudangshan, after a sacred Taoist mountain in the company’s home province. , Hubei. YMTC has a tradition of naming its chips after famous Chinese mountains.
A source said the project intends to use only Chinese equipment and that YMTC has placed large orders with domestic equipment suppliers, including Beijing-based Naura Technology Group, a major Chinese manufacturer. of engraving tools, which are also the American company’s main product line. Lam search.
The source added that YMTC has even asked its domestic suppliers to remove logos and other identifying marks from equipment, to mitigate the risk of US sanctions on its suppliers. Washington also accused YMTC of supplying electronic components to Huawei Technologies Co, the Chinese telecom giant also under US sanctions.
YMTC and Naura did not respond to a request for comment. YMTC, which is an unlisted and unlisted company, is not required to disclose its financial results or business performance.
Yangtze Memory Technologies Corp’s fourth generation 3D TLC flash memory. Photo: Handout alt=Fourth generation 3D TLC flash memory from Yangtze Memory Technologies Corp. Picture: Document>
Industry experts point out that there are still “choke points” in China’s chipmaking supply chain. For example, there are no viable Chinese alternatives for metrology tools supplied by US OEM KLA, or for lithography systems available from Dutch company ASML and Japanese suppliers such as Nikon and Canon. It’s not immediately clear if the new project is based in Wuhan, YMTC’s hometown, or how the company will deal with equipment supply bottlenecks.
“We’re trying to find bottleneck solution companies (to invest in),” a Beijing-based investor said at a recent venture capital event focused on new energy vehicles and semiconductor-related companies. “China is trying to resolve these choke points one by one.”
Increase in Chinese equipment supply comes after YMTC received $7 billion in new financing of its state-backed investors, including the National Integrated Circuit Industry Investment Fund, known as the “Big Fund”.
The Financial Times first reported in late March that YMTC would begin chip production next year at a new factory equipped with local tools.
YMTC is China’s best hope of competing in the global market for 3D NAND chips, a type of non-volatile flash memory where memory cells are stacked vertically to increase storage density. YMTC’s global market share in the NAND sector is estimated to be around 6%, according to a memo published by Bernstein last October.
In October last year, the US Bureau of Industry and Security expanded its export control rules to further restrict Chinese chipmakers’ access to tools, software and even talent. Americans, in an effort to limit China’s advanced chip manufacturing capabilities, including 3D NAND. 128-layer chips. Two months later, YMTC was added to the so-called Entity List, which restricts the purchase of American goods and services without Washington’s approval.
Aerial view of YMTC’s semiconductor factory in Wuhan, Hubei province. Photo: Document alt=Aerial view of YMTC’s semiconductor factory in Wuhan, Hubei province. Picture: Document>
The sanctions and localization efforts come amid a drop in demand for flash memory products, leading to YMTC cut jobs and drastic reduction in equipment purchases.
Many analysts believed that YMTC would be squeezed out of the advanced 3D NAND chip market without the support of major equipment vendors. However, with new funding and an improving Chinese economy following the lifting of Covid-19 controls, the company may decide to press ahead with plans to mass-produce its 232-layer 3D NAND chip that would put it on a technological equal footing with its global peers. like samsung.
YMTC launched the X3-9070 in August 2022. A few months later, the chip was identified in a Hikvision SSD, according to a teardown report from TechInsights, a Canadian semiconductor research company.
The X3-9070 caused a stir after Shenzhen Power Electronics Technology said on its WeChat account earlier this month that it had introduced a new solid-state drive based on the chip, which offered greater storage capacity at lower prices. lower.
Lu Chenyi, head of credit at Moody’s, said in a webinar on Wednesday that China was accelerating the development of its domestic semiconductor industry in the face of U.S. restrictions. “Chinese companies (need) to first get the equipment and technology to make advanced chips and then expand their production,” Lu said, adding that China needs at least five years to catch up with the industry. world leaders in advanced chip manufacturing.
Erica Su, head of strategy and transactions at EY China, said that in China “market sentiment for semiconductors is high” as companies, investors and government are on the same length of battle. wave when it comes to stimulating flea production. The booming Chinese market for new energy vehicles and other smart industries has created strong local demand for chips, Su added.
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