China’s YMTC eyes expansion with two new chip plants

Chinese memory chipmaker Yangtze Memory Technologies is planning to build two additional factories alongside one nearing completion, a move that could more than double its production capacity.

The expansion comes as China continues its push to reduce reliance on foreign semiconductor technologies, a sector where the United States has imposed restrictions to curb Beijing’s progress.

A cross-party group of US lawmakers recently proposed further tightening export controls on chipmaking equipment destined for China, highlighting the geopolitical backdrop to YMTC’s expansion strategy.

Production capacity set to rise sharply

Each of the three new facilities is expected to have the capacity to produce 100,000 wafers per month when fully operational.

This would mark a substantial increase compared to YMTC’s current capabilities.

The company currently operates two fabrication plants with a combined capacity of 200,000 wafers per month, sources told Reuters.

The new facilities are expected to significantly boost this output, reinforcing YMTC’s position in the global NAND flash memory market.

The plans for the two additional factories, along with details about the third plant nearing completion, are being reported for the first time.

YMTC did not respond to Reuters’ request for comment.

Third factory nearing operational stage

The company’s third factory, located in Wuhan like its existing facilities, is expected to begin operations later this year.

The plant is projected to reach a production capacity of 50,000 wafers per month by 2027.

Sources told Reuters that construction of the facility has been completed, and YMTC is currently installing equipment.

More than half of this equipment has been sourced from domestic suppliers, including tools critical for vertical stacking of chip layers.

Stronger domestic supply chain ties

YMTC has been strengthening ties with local equipment manufacturers following its inclusion on the US Commerce Department’s Entity List in December 2022.

The report noted that the company has increased collaboration with domestic firms such as Advanced Micro-Fabrication Equipment.

These partnerships are aimed at reducing reliance on foreign technology amid tightening export controls.

AMEC also did not respond to Reuters request for comment.

Reuters added that it could not determine the timeline or location for the two newly planned factories.

Technological progress and market position

Founded in 2016 in Wuhan with backing from local government and state-supported investment funds, YMTC has made rapid advancements in chip technology.

The company’s latest Xtacking 4.0 architecture is considered competitive with offerings from global leaders.

In terms of market share, YMTC accounted for 11.8% of the global NAND flash market last year, according to a UBS report cited by Reuters.

While Samsung leads with 30.4%, YMTC is on par with Sandisk and trails competitors such as SK Hynix, Kioxia, and Micron.

UBS expects YMTC’s market share to exceed 14% by early 2027.

Expansion into the DRAM segment

YMTC is also moving into DRAM production, which is used for temporary data processing in electronic devices.

Sources told Reuters that all three new plants will allocate some capacity to DRAM manufacturing.

The exact scale will depend on the company’s progress in developing these chips.

YMTC has already sent low-power DRAM samples to clients and expects feedback by the end of the year.

This feedback will help determine the company’s future production strategy in the DRAM segment.