April 14 (Reuters) – Chinese chipmaker Yangtze Memory Technologies (YMTC) aims to build two more factories in addition to one that will be completed this year, which will more than double its production capacity when all three are up and running, people familiar with the plans said.
China has been keen to wean itself from foreign technologies such as semiconductors – a critical sector that the U.S. has sought to limit Chinese advancements in. This month, a cross-party group of U.S. politicians proposed imposing further restrictions nL6N40M0EZ on exports of chipmaking tools to China.
The three new plants will each have the capacity to produce 100,000 wafers per month when fully operational, said three sources who were not authorised to speak to media and declined to be identified.
Unlisted YMTC, China’s largest maker of NAND flash memory chips that store data in smartphones and computers, currently has two fabs which can produce a combined 200,000 wafers per month, they added.
Its plans for the two new plants as well as details about the factory that is close to completion are being reported by Reuters for the first time.
YMTC, one of many Chinese companies that the U.S. restricts sales of goods to, did not respond to a request for comment.
STRONGER TIES WITH DOMESTIC SUPPLIERS
YMTC’s third factory, which like its first two plants is located in Wuhan, should start operations late this year and be capable of producing 50,000 wafers per month by 2027, according to two of the sources.
The building has been completed and the company is currently installing equipment, they said, adding that more than 50% of equipment has been sourced from domestic companies including critical tools used for vertical stacking of chip layers.
YMTC has intensified collaboration with local suppliers such as Advanced Micro-Fabrication Equipment (AMEC) since the U.S. Commerce Department added YMTC to its Entity List in December 2022, they said.
AMEC also did not respond to a request for comment.
Reuters was not able to learn target operational dates for the two factories being planned or where they might be located.
RAPID PROGRESS IN TECHNICAL KNOW-HOW
Founded in 2016 in Wuhan with strong backing from local government and major state-backed chip investment funds, YMTC has made relatively quick strides in know-how, and analysts say its latest Xtacking 4.0 architecture is on par with products from sector leaders like Samsung Electronics.
Although most of its sales are in China, YMTC accounted for 11.8% of the global NAND flash market last year, according to a UBS report. While Samsung commands 30.4% of the market, YMTC has the same share as Sandisk and is not too far behind SK Hynix, Kioxia and Micron which hold 16%, 15.9% and 13.3% respectively.
UBS predicts YMTC’s share will exceed 14% by early 2027.
YMTC is also expanding into DRAM, the memory chips used for temporary data processing in electronic devices.
All three new plants will allocate some capacity to DRAM production, two sources said, adding that the exact amount will depend on the company’s progress in developing those chips.
YMTC has sent low-power DRAM (LPDDR) samples to clients and expects feedback by the end of the year, which will inform DRAM production decisions, they added.
(Reporting by Reuters staff; Editing by Miyoung Kim and Edwina Gibbs)
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