Chinese chipmaker YMTC plans two more fabs under US curbs

Wuhan-based NAND flash chipmaker Yangtze Memory Technologies plans two more fabs in addition to a third plant due to start operations late this year, people familiar with the matter said.

The expansion comes as China seeks to cut reliance on foreign chip technology, and amid US restrictions on sales of goods to YMTC.

The sources said the two planned fabs would each make 100,000 wafers a month, and the third should reach 50,000 by 2027.

YMTC now has capacity for 200,000 wafers a month, so the buildout would more than double output if all three plants open as planned.

Two sources also said all three new plants would reserve some capacity for DRAM as YMTC tests LPDDR samples with customers.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

YMTC’s expansion plans face the harsh reality of US sanctions

US sanctions imposed in late 2022 limit Yangtze Memory Technologies’ access to foreign chipmaking equipment, which it needs to expand production 1.
Those limits have slowed factory growth and helped reverse the company’s earlier market share gains 1.
To build new fabs, the company is shifting to Chinese-made tools that still lag foreign machines in performance 1.
TechInsights, a semiconductor research firm, and other reports say Yangtze Memory Technologies has shipped 232-layer NAND and is working on higher-layer products, including 300+ layer NAND 1.

A dual-front expansion creates a strategic dilemma for incumbents

If it works, the expansion could add large NAND capacity and put more downward pressure on prices for incumbents such as Samsung and Micron 2.
Rivals may face a hard call. They can give up more low-margin consumer sales to Yangtze Memory Technologies or fight a costly price war 3.
The plan also sets aside some capacity for Dynamic Random Access Memory (DRAM) while Yangtze Memory Technologies tests Low Power Double Data Rate (LPDDR) samples with customers, which would challenge a market long led by Samsung, SK hynix, and Micron.
For electronics makers, another credible supplier could improve negotiating leverage. Reports say Apple is reviewing the use of the company’s NAND 3.