China is not backing down on memory, says Yole ...

China is a significant buyer of NAND flash and DRAM components accounting for 30 percent or more of each category. It was gradually building up its domestic capability with Yangtze Memory Technologies Co. (YMTC) as its leading NAND flash producer (see China's YMTC confirms lead in 3D NAND flash memory) and ChangXin Memory Technologies (CXMT) as the leading DRAM maker (see Chinese startup starts DRAM production).

Semiconductor memory sales in 2022 by geography. Source: Yole Group.

Yole estimates China's self-sufficiency in memory to be less than 15 percent.

Apple's idea that YMTC could supply NAND flash for its smartphones, which are assembled for Apple in China by Hon Hai Precision Industries (Foxconn) was quickly squashed. And in October 2022 the US set additional restrictions on supply of chipmaking equipment and added YMTC to the so-called "entity list." (see Advanced logic, memory, YMTC come under China export controls).

The restrictions will prevent YMTC and CXMT from becoming competitive in the memory business.

YMTC is currently shipping 64- and 128-layer NAND domestically, with 232-layer in early production with its innovative Xtacking 3.0 architecture, said Yole. YMTC's wafer ramp-up is effectively capped at 115K to 120K wafers per month and its technology roadmap on hold due to a lack of support from key equipment vendors. Lack of access to spares and consumable items could see YMTC's production capacity diminish.

Although CXMT was not added to the "entity list" this company also faces significant challenges in the execution of its roadmap. It is producing 27nm memories to the DDR4 and LPDDR4 standards while 1xnm memories are ramping. To maintain this capability and ramp volume will be difficult. To progress to 1ynm and 1znm could be impossible.

And yet YMTC's capital expenditure matched that of Micron Technology Inc. in 2022 and CXMT spent plentifully for the size of company it is.

NAND flash and DRAM capex for 2021 and 2022. Source: Yole Group.

It can be argued that Chinese chip manufacturing infrastructure is not complete – particularly at the leading edge – but it is also notable that the Chinese semiconductor equipment companies’ sales have gone up by almost a factor of ten over the last six or seven years.

China wafer fab equipment vendors’ annual revenue from 2016 to 2022. Source: Yole Group.

"Although the future of China's memory industry remains uncertain, what is clear is that memory will continue to be a strategic priority for the Chinese semiconductor ecosystem, and China will do everything possible to keep their workhorse memory companies – YMTC and CXMT – alive and running," concludes Yole.

www.yolegroup.com

China's YMTC confirms lead in 3D NAND flash memory

Chinese startup starts DRAM production

Advanced logic, memory, YMTC come under China export controls