China memory business: no signs of slowing down, asserts Yole Group

The semiconductor memory industry has long been a strategic priority for China’s economic development. Chinese companies purchase more than 30% of the NAND and DRAM products manufactured by global IDMs, while China’s self-sufficiency in memory is currently estimated to be below 15%.

The large gap between memory consumption and production in China is fueling the country’s burning desire to produce an ever-increasing amount of NAND and DRAM wafers locally.

The restrictions prohibit US companies – including leading-edge equipment suppliers – from exporting certain technologies to Chinese companies. The technologies in question include those related to equipment used for manufacturing leading-edge NAND and DRAM devices vital for YMTC and CXMT to progress and become competitive in the very challenging 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. However, in December 2022, YMTC was added to the so-called “Entity List,” which means that U.S. businesses cannot sell products or services to YMTC unless an export license is granted. Therefore, NAND progress could stall, with YMTC’s wafer ramp-up capped at 115~120K wafers per month and its technology roadmap on hold due to a lack of support from key equipment vendors…

Despite not being added to the “Entity List,” the company faces significant challenges in the execution of its roadmap. Initial production (Gen 1, ~27nm memory density equivalent) is now available (DDR4 & LPDDR4), while Gen 3 (1xnm equivalent) is currently ramping. However, WFE support for this node will likely be challenging due to the export restrictions, and CXMT’s roadmaps are likely to be significantly slowed down. Like YMTC, CXMT is also reacting rapidly to gather the resources necessary to face the headwinds. A Bloomberg article published on April 20th, 2023, introduced the rumor that the company is seeking an IPO at a valuation of more than $14B. For a six-year-old company, this is an astonishing figure, but this should be put in the context of the global memory industry, where R&D spending and capital expenditures by global suppliers can easily surpass the single-digit billion-dollar amount over a 2-year period…

In conclusion, the U.S. trade restrictions pose a significant challenge to China’s memory industry, which relies heavily on imported technologies. However, China has not shown any signs of backing down from its semiconductor memory ambition…
Yole Intelligence’s Memory team reviews and analyzes the impact of the latest restrictions in a new article. Using its market & technical knowledge and related products, Status of the Memory Industry and Memory Packaging, as well as the two Market Monitors, DRAM and NAND, analysts deliver an impressive picture of the memory market status and the strategic moves deployed by the leading Chinese players.

Read the full article on www.yolegroup.com.