US sanctions can derail chip maker YMTC’s ambitions

Yangtze Memory Technologies Co (YMTC), China’s top memory chip maker, has taken another step to becoming a global leader in its semiconductor market segment, according to TechInsights’ latest Disruptive Event report, amid the US government’s recent actions to hold back advanced integrated circuit development on the mainland.

That conclusion was reached by TechInsights, a Canadian semiconductor and microelectronics intelligence provider, after it found that YMTC has introduced “the first 200+ layer 3D NAND Flash available on the market”, ahead of the industry’s leading memory chip makers Samsung Electronics, SK Hynix and Micron Technology.

“At their current rate of innovation, YMTC is poised to be the uncontested global NAND Flash technology leader before 2030,” TechInsights said in the report published this week. NAND Flash is a type of non-volatile storage technology that retains data even without power, which has made it ideal for many electronics devices such as smartphones, tablets, laptop computers and solid-state drives (SSDs).

Proof of YMTC’s latest NAND Flash innovation, described in the report as Xtacking 3.0, was found in November by TechInsights, which performed reverse engineering analysis on a 2-terabyte SSD from Chinese surveillance camera maker Hangzhou Hikvision Digital Technology Co.

Founded in 2016, YMTC was credited in the report for producing “a 232-layer NAND Flash, ahead of its rivals”. This advanced technology makes the Chinese firm a “serious contender” that is “closing in on the global memory giants”, despite Covid-19 lockdowns in China, geopolitical challenges and US trade sanctions.

The advantages of YMTC’s latest accomplishment include greater storage and shortened development through its Xtacking system.
“In YMTC’s Xtacking, the memory array is flipped and bonded to the CMOS [complimentary metal-oxide semiconductor transistor],” the report said. “This approach, YMTC claims, reduces product development time by at least three months, and shortens the manufacturing cycle time by 20 per cent.”

The company has not officially released its 232-layer memory chip.

Despite its achievements, “YMTC still faces an uphill battle” because recent actions by Washington could significantly impact the company’s “ability to produce devices at scale, and to progress quickly to the next generation”, the TechInsights report said.

The latest US restrictions and the risk of being put under Washington’s trade blacklist reflects the major challenges faced by YMTC, which was reportedly dropped by Apple as a memory chip supplier.

The Bureau of Industry and Security (BIS), an agency under the US Department of Commerce, on October 7 implemented updates that further restrict China’s ability to obtain advanced computing chips, develop and maintain supercomputers, and manufacture advanced semiconductors used in military applications, including weapons of mass destruction.

The BIS also updated policies related to the Unverified List and the US export blacklist, known officially as the Entity List. The BIS will add parties to the Unverified List 60 days after checks are requested, but a host government’s inaction would prevent their completion. YMTC and 30 other Chinese semiconductor entities were added to the Unverified List.

In an apparent signal to Washington, YMTC issued a statement in late October saying it was compliant around the world. “We’ve always adhered to the principle of legal and compliant operation across the globe since establishment,” the company said.

Still, more challenges lie ahead, according to analysts.

“The latest US sanctions created huge difficulties in [acquiring] semiconductor equipment for YMTC to add production capacity and advance its technology,” said He Hui, semiconductor research director at independent tech consultancy Omdia. She suggested that the BIS could “freeze YMTC’s technology [development] at its current levels” if the US agency continues to tighten its scrutiny of the company. South China Morning Post