The Chinese language reminiscence chip producer Yangtze Reminiscence Applied sciences plans to deliver on-line a second plant in its dwelling metropolis of Wuhan as early as the tip of this yr, sources acquainted with the matter say, in a transfer that might additional shut the corporate’s expertise and output hole with international leaders reminiscent of Samsung of South Korea and Micron Expertise of the US.
The corporate, also called YMTC, must increase manufacturing after a development spurt that put it on the world’s semiconductor map and delivered a notable success in Beijing’s try to cut back China’s reliance on imported chips.
Its unique plant has been operating close to capability and churned out 100,000 wafers a month on the finish of 2021, two folks instructed Nikkei Asia.
YMTC held a world market share of almost 5 per cent final yr, based on analyst and trade estimates. It has grow to be the world’s sixth-largest Nand flash reminiscence maker behind Samsung, SK Hynix, Kioxia, Western Digital and Micron, and the one one from China.
About 40 per cent of its output at current is 128-layer 3D Nand flash reminiscence, essentially the most superior produced to date by a Chinese language chipmaker. However that’s one or two generations behind international leaders Samsung, SK Hynix and Micron. The remainder of YMTC’s output is of older 64-layer 3D Nand flash reminiscence.
This text is from Nikkei Asia, a world publication with a uniquely Asian perspective on politics, the economic system, enterprise and worldwide affairs. Our personal correspondents and out of doors commentators from all over the world share their views on Asia, whereas our Asia300 part gives in-depth protection of 300 of the largest and fastest-growing listed corporations from 11 economies outdoors Japan.
The brand new plant would first construct primarily 128-layer flash reminiscence and will later shift to much more cutting-edge chips, reminiscent of 196-layer or 232-layer 3D Nand flash reminiscence, assuming growth goes easily in 2023 and 2024.
Apple has been testing YMTC’s flash reminiscence merchandise since final yr and will place its first order for “restricted portions” as quickly as this yr, two folks acquainted with the matter instructed Nikkei Asia. The US tech large has been speaking with the Chinese language chipmaker since 2018 in hopes of discovering a cheap supply of storage elements.
Securing a cope with Apple could be a milestone, highlighting the standard of Yangtze Reminiscence’s chips, trade executives say. Apple’s Chinese language suppliers, together with these from Hong Kong, already outnumber these from Taiwan, making China the most important supply of suppliers to the US firm, based on a Nikkei Asia evaluation. Apple additionally has shut ties with a number of Chinese language electronics producers, together with Luxshare, Goertek and BYD.
Yangtze Reminiscence’s success can also be seen as a victory for China, because the world’s second-largest economic system strives to localise semiconductor manufacturing and construct trade champions. Yangtze Reminiscence is backed by the China Built-in Circuit Business Funding Fund, Beijing’s most necessary chip funding funding car. And YMTC is bullish on its development prospects, rising its funding price range from $24bn in 2016 to the equal of $32.8bn this yr.
The Chinese language chipmaker is presently putting in tools on the new chip plant, a key step earlier than it goes into manufacturing. The manufacturing unit will ultimately have twice the capability of the primary, a number of folks briefed on the matter mentioned. The full capability for the 2 factories will attain 300,000 wafers per thirty days and will assist YMTC increase its market share to greater than 10 per cent globally.
The corporate is cut up into two parallel groups composed of lots of of prime engineers tasked with growing 196-layer and 232-layer flash reminiscence, one of many folks mentioned. Its purpose is to meet up with international rivals.
Probably the most superior merchandise available on the market, which Samsung, Micron and SK Hynix have all succeeded in producing, are 176-layer 3D Nand flash reminiscence chips. They’re now racing to create chips composed of greater than 200 layers. Kioxia and Western Digital mentioned they are going to be making 162-layer 3D Nand flash reminiscence by the tip of the yr.
The extra layers a flash reminiscence chip has, the extra superior the chips are — and the tougher they’re to develop and produce commercially. Nand flash reminiscence is an important storage part utilized in every kind of digital units, from smartphones and PCs to knowledge centre servers and related vehicles.
Most YMTC flash reminiscence is presently used to make consumer-grade solid-state drives (SSDs), primarily for the Chinese language market. Its shoppers embody main storage makers Lenovo, Longsys and Kimtigo of China, in addition to Adata of Taiwan. YMTC has additionally launched its personal model, ZhiTai, to promote SSDs on to customers.
Its share of the worldwide flash reminiscence market has risen shortly from 1.3 per cent in 2019, when it first put 64-layer Nand flash reminiscence into manufacturing, based on Counterpoint Analysis, which believes it might seize almost 6 per cent of the market by 2023, up from 4.8 per cent in 2021.
Brady Wang, an analyst at Counterpoint, instructed Nikkei Asia that Yangtze Reminiscence had been engaged on its expertise even earlier than the corporate was formally launched in 2016. It had demonstrated its capabilities and regularly grow to be a viable international participant after years of effort, Wang mentioned. It had additionally greater than doubled its payroll in 4 years, to about 8,000 workers presently.
“It recruits many engineers and veterans who’ve Chinese language backgrounds however used to work for multinational tech and chip corporations,” Wang mentioned. “Managing a plant, nevertheless, is totally different from managing a number of crops at a large scale. It stays to be seen if it [can] efficiently ramp up manufacturing.”
Political rigidity between the US and China additionally will increase uncertainties for Chinese language corporations like YMTC, Wang mentioned.
Washington has slowed the advance of China’s semiconductor trade by including the nation’s prime chipmaker, Semiconductor Manufacturing Worldwide Co, and the telecom tools group Huawei, to a commerce blacklist to limit their use of American expertise. Yangtze Reminiscence has been among the many most aggressive corporations in pushing forward with the event of home chipmaking tools, nevertheless it continues to take care of good relationships with US and different international distributors to make sure its growth plans come to fruition.
YMTC declined to remark for this story.
A version of this article was first printed by Nikkei Asia on June 23, 2022. ©2022 Nikkei Inc. All rights reserved.
