Chinese state-owned memory chip maker YMTC seeks independence from U.S. sanctions by establishing a production line utilizing domestic technology, aiming to claim a 15% share in the global NAND market by the end of 2026.
Despite being on the U.S. Commerce Department’s Entity List since late 2022, Yangtze Memory Technologies Co. (YMTC) has continued to grow its NAND memory production capacity. Here's a look at the strategies YMTC is employing to achieve this growth:
Domestic Supply Chain Development
YMTC has invested heavily in local tool and material suppliers, often routing investments through non-listed or indirect entities to avoid U.S. scrutiny. This move aims to reduce dependence on foreign suppliers and build a self-reliant ecosystem capable of supporting advanced semiconductor manufacturing within China. Companies like AMEC, Naura Technology, and Piotech are among YMTC’s domestic tool suppliers for etching, chemical vapor deposition, atomic layer deposition, and CVD tools.
Proprietary Technology and Vertical Stacking
YMTC is pushing the limits of its proprietary Xtacking architecture, which bonds separately produced memory cell arrays and peripheral circuits to increase storage density and performance. The company recently began mass production of its X4-9070 3D TLC NAND with 232 active layers and a total of 294 active layers, achieved by bonding two structures containing 150 and 144 layers each. While this still lags behind the 321-layer NAND from SK hynix and 286 layers from Samsung, YMTC’s rapid progress demonstrates a narrowing technology gap.
Expansion of Production Capacity
While global NAND leaders like Samsung and SK hynix are cutting production due to oversupply and falling prices, YMTC is continuing to ramp up output. The company was projected to reach 130,000 wafer starts per month (WSPM) by the end of 2024 (about 8% of global supply) and aims to increase this to 150,000 WSPM by the end of 2026. This aggressive expansion is intended to capture a 15% global market share by late 2026.
Performance and Market Impact
YMTC’s NAND has achieved 20.47 gigabits per square millimeter, a significant improvement that indicates competitive performance in key metrics. This has contributed to a global NAND oversupply, pressuring prices and profitability across the industry, but has positioned YMTC as a growing force in the memory market.
Future Plans
YMTC plans to begin trial production on a new manufacturing line built entirely with domestically developed equipment in the second half of 2025. The company also intends to release its 3D QLC X4-6080 device later this year. YMTC's next-generation node will likely use more than 300 layers and will likely require bonding three 3D NAND structures together.
While YMTC's plan to localize 100% of their tools looks unrealistic for now, they are making strides towards self-sufficiency. Shanghai Microelectronics Equipment's SSX600 can make logic chips on a 90nm process technology, and they are working on more advanced tools.
In conclusion, YMTC’s success in expanding NAND production under U.S. sanctions can be attributed to its concerted efforts to cultivate a domestic supply chain, rapidly advance proprietary manufacturing technologies, and aggressively increase production capacity even as global competitors pull back. While challenges remain in matching the absolute technological leadership of Korean and American firms, YMTC’s progress demonstrates China’s growing capabilities in semiconductor self-sufficiency and its determination to compete in advanced memory markets despite geopolitical constraints.
Technology plays a crucial role in YMTC's strategies to expand its NAND memory production capacity, as demonstrated by its proprietary Xtacking architecture and the use of tools from domestic suppliers like AMEC, Naura Technology, and Piotech. Data-and-cloud-computing technologies are also embraced by YMTC, as evidenced by their aim to localize 100% of their tools and their plans to invest in advanced equipment for self-sufficiency.
