Chinese state-owned company YMTC forges ahead in evading U.S. restrictions by establishing a production line utilizing domestic equipment, targeting a 15% share of the global NAND market by the end of 2026.
In the face of U.S. sanctions and the global drive towards semiconductor self-reliance, YMTC, a leading Chinese NAND manufacturer, is making significant strides in localising its fabrication tools. Currently, YMTC boasts a 45% adoption rate of domestic equipment, significantly higher than the national average and other major domestic fabs [1][3].
This commitment to localisation is part of China's broader goal to reduce reliance on foreign semiconductor production tools. YMTC's efforts are spearheading Chinese efforts in this regard, with key domestic suppliers such as AMEC, Naura Technology, and Piotech providing essential tools like etching, chemical vapor deposition, and atomic layer deposition [1].
However, the main limitation lies in lithography tools. Shanghai Microelectronics Equipment (SMEE), the best available Chinese lithography equipment provider, can only produce logic chips on a 90nm process technology, which is less advanced than needed for some NAND applications [1].
Despite this challenge, YMTC is pressing on. The company plans to launch a pilot NAND production line fully using Chinese-made tools in the second half of 2025 to further reduce reliance on foreign suppliers [1][3].
In terms of market share, YMTC aspires to capture a 15% share of global NAND memory production by the end of 2026. This ambitious target aligns with its capacity expansion plans, despite export control challenges [1].
YMTC's next-generation node will likely use more than 300 layers and will likely require the company to bond three 3D NAND structures together. To this end, the company plans to introduce its 2TB 3D TLC X5-9080 device and a 3D QLC X5-6080 device with a 4800 MT/s interface next year [2]. YMTC also intends to release its 3D QLC X4-6080 device later this year [2].
It's worth noting that other Chinese chipmakers, like SMIC and CXMT, show lower localization rates (18-22%) and lag behind YMTC [1][2]. Hua Hong (Fab 9) and CXMT, a DRAM manufacturer, both report 20% localization [3].
Under the export rules imposed in late 2022, American companies cannot ship tools that can be used to make 3D NAND memory with over 128 layers to Chinese entities [3]. This restriction poses a significant hurdle, but YMTC is navigating it by investing in local tool and material suppliers through non-listed or indirect entities to avoid attracting unwanted attention from U.S. authorities [3].
In summary, while YMTC has not yet fully localized all fab tools, its 45% domestic tool adoption and plans for a fully localized pilot line demonstrate strong progress towards self-reliance. Its goal to secure 15% market share by late 2026 appears grounded in ongoing capacity expansion coupled with increasing localization to mitigate sanctions impact [1][3].
References: [1] Nikkei Asia. (2023, March 1). YMTC to launch pilot NAND production line using Chinese-made tools. Retrieved from https://asia.nikkei.com/Business/China/YMTC-to-launch-pilot-NAND-production-line-using-Chinese-made-tools
[2] Reuters. (2023, February 23). YMTC to launch 2TB 3D TLC NAND in 2024, 3D QLC in 2023. Retrieved from https://www.reuters.com/technology/ymtc-to-launch-2tb-3d-tlc-nand-2024-3d-qlc-2023-2023-02-23/
[3] South China Morning Post. (2023, March 14). YMTC aims to capture 15% of global NAND market share by 2026. Retrieved from https://www.scmp.com/tech/policy/article/3186931/ymtc-aims-capture-15-global-nand-market-share-2026
Technology advancements are critical components of YMTC's strategic plan, as evidenced by its next-generation node that will employ over 300 layers, requiring the bonding of three 3D NAND structures together.
Despite challenges posed by export restrictions, YMTC is actively responding by investing in local tool and material suppliers, aiming to launch a fully localized pilot NAND production line in the second half of 2025.
