American firms are afraid of this Chinese chip company

China’s YMTC, a semiconductor manufacturer specializing in flash memory, is beginning to put pressure on US companies. As a result, the government of President Joe Biden consider taking action, reports Reuters.

Yangtze Memory Technologies Co., YMTC for short, is an emerging player in the world of NAND memory, the most common type of flash memory. NAND is used in various types of storage devices, including SSDs, USB sticks and SD cards. NAND memory is non-volatile, which means that stored data is maintained even when the power is turned off.

Currently owning Western Digital Corp. in Micron Technology Inc., two US companies, about 25 percent of the market share of NAND manufacturing. But YMTC is now starting to overtake.

YMTC rises through the ranks

By offering lower prices than the competition, partly because China has provided it with some $24 billion in subsidies, the White House is even speaking of a “immediate threat” in a report published in 2021. China, on the other hand, describes YMTC as a “national champion”.

In the meantime, the Chinese company has been growing steadily: in 2019 it had only 1.3 percent of the market share, in 2021 that had already increased to 4.8 percent, a fourfold increase. It is now also starting to attract big names in the tech world: YMTC, for example, is currently in talks with Apple to provide the iPhone maker with flash memory chips.

US wants to intervene

The fact that YMTC and other Chinese companies are growing so strongly makes the US government nervous. The White House is now considering stepping in, by supplying US equipment for chip production to limit to China. That’s what a number of sources with knowledge of the case said Reuters.

More specifically, it would be equipment used to make NAND chips with more than 128 layers. By comparison, Micron announced last week that it has begun shipping chips with 232 layers to manufacturers. Due to that large amount of layers, the chips could be made faster and smaller.

The American companies LAM Research Corp. in Applied Materials are the largest suppliers of equipment to manufacture NAND chips.

No confirmation yet

It would be the first time that the US has imposed export restrictions on Chinese production of chips for the commercial market. It previously imposed restrictions on the export of equipment for specialized chips for military applications. At the beginning of July, the US asked Japanese and Dutch suppliers of chip production technology to stop supplying China. Beijing then accused the US of “technological terrorism”.

For now, however, the plan would still be in the early stages of the decision-making process. There is no legislative framework yet to be proposed. A spokesperson for the US government wanted to Reuters confirm nothing, but noted that “the Biden administration is focused on hindering (China’s) efforts to produce advanced semiconductors to address key national security threats to the United States.”

(jvdh)

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