Top China Memory Chipmaker Still Can’t Wean Itself Off U.S.
(Bloomberg) — China’s top flash memory chipmaker sees no easy way to replace U.S. chipmaking gear, underscoring how a further crackdown on the supply of American technology will devastate the local semiconductor industry.
Yangtze Memory Technologies Co. gets over 80% of its equipment from the U.S. and Japan now, said Zheng Jiuli, vice president in charge of supply chain management. While some Chinese suppliers have made breakthroughs in areas including etching, cleaning and coating, there aren’t enough local alternatives to replace everything, he added.
“Long-term investments in innovation and R&D have led to technological advantages” at U.S. and Japanese suppliers, Zheng said. “This is also the reason why their products are currently in the mainstream and are difficult to replace.”
The deficit of basic chipmaking equipment complicates Beijing’s ambitions to reduce its reliance on its geopolitical rival. China has rolled out a number of measures to boost its domestic chip industry, including creating a $29 billion semiconductor investment fund and Beijing is planning to provide broad support for so-called third-generation semiconductors in its next five-year plan, Bloomberg News reported last week. The manufacturing of these chipsets, which are mainly made of materials such as silicon carbide and gallium nitride, only has limited exposure to U.S. vendors, analysts at Citigroup have said.
Read more: China Said to Plan Broad Chip Sector Support to Fight Trump
Yangtze Memory hasn’t set a target for domestic procurement, Zheng said, adding that it would be “unscientific” to do so. It has been collaborating with chip firms from the U.S., Japan, South Korea and Europe on talent and technology and will continue working with these global companies, he said. Yangtze Memory has said it will invest $22 billion in a facility in Wuhan that’s by far China’s most advanced factory for 3D NAND, the latest iteration of storage used in smartphones and high-end computing.China’s giant chip industry is bracing for further Trump sanctions. Efforts by the White House to constrain the rise of China’s tech giants have already led to bans on exports of U.S. technologies and equipment to Huawei Technologies Co., the largest Chinese maker of handsets and 5G networking gear.
The U.S. shouldn’t be terrified by China’s growth, Zhao Weiguo, chairman of Yangtze Memory parent Tsinghua Unigroup Co., said last year. Unigroup and other Tsinghua affiliates have pulled off a number of acquisitions over the years, including of RDA Microelectronics Inc. and Spreadtrum Communications Inc., to beef up their design capability, and signed partnership deals with global players including Western Digital Corp.
Read more: China’s Top Chipmaker Secures $22 Billion to Expand Globally
(Adds comments on cooperation with global firms in fifth paragraph)
bloomberg.com” data-reactid=”36″>For more articles like this, please visit us at bloomberg.com
Subscribe now to stay ahead with the most trusted business news source.” data-reactid=”37″>Subscribe now to stay ahead with the most trusted business news source.
©2020 Bloomberg L.P.