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 set in October 2022 by the US government have resulted in strong headwinds against China’s memory ambition, jeopardizing the fab-capacity expansion and the roadmap execution of Yangtze Memory Technologies Co. (YMTC) and ChangXin Memory Technologies (CXMT), the two leading Chinese memory IDMs .
Yole Intelligence’s Memory team reviews and analyzes the impact of the latest restrictions in this 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. Discover today an up-to-date analysis of the latest news coming from the memory industry.
Yole Intelligence is a Yole Group company.
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 the leading NAND maker in China and 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.
YMTC has been looking to countries such as Japan, Taiwan, and South Korea, major suppliers of semiconductor equipment and materials. Moreover, the company has considerably intensified its efforts to work with Chinese equipment suppliers (Figure 2) through a not-so-visible project code-named “Wudangshan” and recent funding – of the order of $7B – from its state-backed investors. Recently, YMTC could place crucial orders with local equipment companies, among which is Naura Technology – a supplier of etching and deposition tools that could help mitigate the lack of support from US companies such as Lam Research and Applied Materials.
- CXMT was founded in 2017 and rapidly became the workhorse DRAM company in China. 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 (e.g., Figure 3) can easily surpass the single-digit billion-dollar amount over a 2-year period.
Although all these financial efforts will help mitigate the impact of the US trade restrictions, China’s memory industry will continue facing significant challenges. The industry requires not only a massive amount of investment, but also considerable expertise and technology developments to catch up with its competitors in the US, Japan, and Korea. Furthermore, the US government could potentially tighten its trade restrictions further, making it even more difficult for Chinese companies to access the technologies they need.
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. On the contrary, with strong financial support from the government, Chinese memory companies can support local equipment vendors and speed up the development of leading-edge tools for NAND and DRAM manufacturing. 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.
Yole Group and its entities, Yole Intelligence and Yole SystemPlus, are continuously monitoring the latest developments in the Chinese memory industry and will continue providing you with cutting-edge information on the topic.
Stay tuned on yolegroup.com!
About the authors
Simone Bertolazzi, Ph.D., is a Team Lead Analyst, Memory, at Yole Intelligence, part of Yole Group, working with the Semiconductor, Memory & Computing division. As a member of Yole’s memory team, he contributes daily to the analysis of memory markets and technologies, their related materials, device architectures, and fabrication processes.
Previously, Simone carried out experimental research in the field of nanoscience and nanotechnology, focusing on emerging semiconducting materials and their optoelectronic device applications. He (co-) authored more than 20 papers in scientific journals and was awarded the prestigious Marie Curie Intra-European Fellowship.
Simone obtained a Ph.D. in physics in 2015 from École Polytechnique Fédérale de Lausanne (Switzerland), where he developed novel flash memory cells based on heterostructures of two-dimensional materials and high-κ dielectrics. Simone earned a double M. A. Sc. degree from Polytechnique de Montréal (Canada) and Politecnico di Milano (Italy), graduating cum laude.
In collaboration with the Memory team from Yole Intelligence:
Thibault Grossi is a Senior Technology & Market Analyst at Yole Intelligence, part of Yole Group, working with the Semiconductor, Memory & Computing division. He is a member of Yole’s memory team and is engaged in the development of technology, market, and strategic analyses. Prior to Yole, Thibault worked at Schneider Electric as a resident engineer in an EMS in Asia and then occupied various positions within the electronic procurement organization (PCBA, Software, and semiconductor). The semiconductor business has been his focus for the last ten years. First in projects procurement and then as category manager for semiconductors and displays, where he was in charge of procurement strategy for memory and analog, led global negotiations, and interfaced with European design projects. Thibault obtained a master’s in electronic and computing science from Pierre and Marie Curie University in Paris in 2006.
Mike Howard is a member of the memory team at Yole Intelligence, part of Yole Group, as VP of DRAM & Memory Research. Mike’s mission at Yole is to deliver a comprehensive understanding of the entire memory and semiconductor landscape by leading the production of market updates and Market Monitors. Mike holds a Master of Business Administration from The Ohio State University (Ohio, United States), a Bachelor of Science in Chemical Engineering, and a Bachelor of Arts in Finance from the University of Washington (Washington, United States).
Walt Coon is the VP of NAND & Memory at Yole Intelligence, part of Yole Group, working in the Semiconductor, Memory & Computing division. Walt is the primary author of the NAND Market Monitor and is based in the US. Walt’s mission at Yole is to deliver a comprehensive understanding of the entire memory and semiconductor landscape by leading the production of market updates and Market Monitors. Walt is also deeply involved in the business development of these activities. Before joining Yole in 2018, Walt spent sixteen years at Micron Technology and two years at IHS Markit. Walt holds a Master of Business Administration from Boise State University (Idaho, United States) and a Bachelor of Science in Computer Science from the University of Utah (Utah, United States).
Diego Alfaro, PhD. is a Technology & Market Analyst, working with the Semiconductor, Memory & Computing division as part for the memory team at Yole Intelligence, part of Yole Group. He collaborates daily with analysis of memory markets, technologies, and manufacturing processes.
Prior to joining Yole, worked at Leti with new generation electronic memories performing characterization, modelling, and reliability analysis. Fruitful publications in important conferences and journals as well as different contacts with industrial players, remained from this experience. He also worked as a Research Scientist with a focus on characterization and modelling of µLED devices for Optical Wireless Communications.
He obtained a PhD in Microelectronics at the Grenoble Alpes University in collaboration with CEA-Leti. He also holds a M.Sc. from the Grenoble Institute Technology (Grenoble INP) in Electronic Integrated Systems with a focus on Radiofrequency Systems and Optoelectronics as well as a B.Sc. in Electrical Engineering from the National University of Colombia.