Overview
Yangtze Memory Technologies (YMTC), China’s largest maker of NAND flash memory, is planning two additional fabrication plants in addition to a third factory that is set to be completed this year, according to people familiar with the company’s plans who spoke on condition of anonymity. When all three facilities are operating at planned output levels, the company’s production capacity will increase by more than double its current wafer output.
Planned capacity and current footprint
Three anonymous sources said each of the three planned plants will be capable of producing 100,000 wafers per month at full operation. YMTC currently operates two fabs that together can produce 200,000 wafers per month, meaning the addition of two more 100,000-wafer-capacity plants plus the one nearing completion would significantly raise the company’s aggregate capacity.
Factory nearing completion
The third factory, like YMTC’s first two plants, is located in Wuhan. Two sources indicated that this facility should begin operations late this year and is projected to achieve a production rate of 50,000 wafers per month by 2027. They said the building is complete and equipment installation is underway.
Those same sources said more than half of the equipment for the near-complete plant has been sourced from domestic suppliers, including crucial tools used for vertical stacking of chip layers. YMTC has stepped up cooperation with local suppliers such as Advanced Micro-Fabrication Equipment (AMEC) following its addition to the U.S. Commerce Department’s Entity List in December 2022. AMEC did not respond to a request for comment, and YMTC did not reply to requests for comment.
Uncertain timing and locations for further plants
Details on the target operational dates for the two additional planned factories, as well as their locations, were not available to the sources who discussed the plans. One source emphasized that specifics for those projects remain undisclosed.
Technology progress and market position
Founded in 2016 in Wuhan with significant support from local government and state-backed chip investment funds, YMTC has advanced rapidly in technical expertise, according to the sources. Analysts cited by the sources say YMTC’s Xtacking 4.0 architecture compares with products from leading peers such as Samsung Electronics.
YMTC accounted for 11.8% of the global NAND flash market last year, per a UBS report referenced by the sources. That market share was said to be the same as Sandisk’s, while Samsung led with 30.4%. Competitors SK Hynix, Kioxia and Micron were reported to hold 16%, 15.9% and 13.3% of the market respectively. UBS projects YMTC’s share will exceed 14% by early 2027.
Move into DRAM and product testing
The company is also expanding into DRAM, which are the memory chips used for temporary data processing in electronic devices. According to two sources, all three new plants will dedicate some portion of capacity to DRAM production, though the precise allocation will depend on YMTC’s progress in developing those chips.
YMTC has reportedly sent low-power DRAM (LPDDR) samples to clients and expects to receive feedback by the end of the year. That customer feedback is expected to inform decisions about how much of the new fabrication capacity will be assigned to DRAM.
Context of export controls and domestic sourcing
The planned expansion occurs against a backdrop of heightened tensions between the United States and China over semiconductor technology. This month, a cross-party group of U.S. politicians proposed imposing further restrictions on exports of chipmaking tools to China. Sources said YMTC has increased reliance on domestic suppliers for critical equipment since being placed on the U.S. Entity List in December 2022.
Concluding note
YMTC’s disclosed plans, as related by the anonymous sources, outline a strategy of rapid capacity expansion and closer ties with domestic equipment manufacturers while the company also pursues DRAM development. Key timelines for the two additional planned fabs and their locations remain unspecified.