Memory Semiconductors No Longer Safe
Yangtze Memory Technologies is a China-based semiconductor manufacturer.
Samsung Electronics and SK hynix, leaders in the memory semiconductor market, are facing intense competition from China. The Chinese government is pouring substantial funds into developing a self-sufficient memory semiconductor industry to reduce its dependency on foreign technology.
According to industry sources on Nov. 20, the technological gap in NAND, a type of memory semiconductor, between Chinese companies and global leaders like the U.S. and South Korea, has narrowed to around two years. An industry insider noted, “While DRAM still maintains a technological gap of over five years, the gap in NAND is narrowing due to its lower technological barriers, allowing for faster catching up. Although it’s hard to say there’s market competitiveness yet, the fact that the speed of technological pursuit has accelerated with significant support is undeniable.”
A notable example is Yangtze Memory Technologies Co. (YMTC), China’s largest memory semiconductor company, which began mass production of 7th generation (232-layer) 3D NAND flash late last year, ahead of Samsung Electronics and SK hynix. When YMTC announced its challenge to jump from 176-layer to 232-layer mass production in July last year, the market doubted the feasibility of developing 200-layer NAND, but YMTC achieved mass production within a year. This success is attributed to over 9 trillion won in support from the Chinese government and state-owned investment firms last year alone.
Despite these advancements, the use of outdated manufacturing equipment produced domestically could mean low yield and business viability for these products. However, continuous astronomical support could soon lead to market penetration starting with technology catching up, as per industry perspectives.
There are concerns that China might seize another opportunity to close the technology gap as the miniaturization of semiconductor circuits reaches its limits. Efficient packaging of multiple chips for high performance, seen as a key to overcoming these limits, is now critical. China, holding the second-largest market share in semiconductor packaging worldwide after Taiwan, boasts a robust ecosystem. According to market research firm IDC, last year, three Chinese companies (JCET, TFMC, HUATIAN) made it into the global top 10 semiconductor packaging (OSAT) companies, while no South Korean company was listed.
Samsung Electronics and SK hynix, leaders in the memory semiconductor market, are facing intense competition from China. The Chinese government is pouring subs