China’s Semiconductor Boom to Continue
The author is an analyst of NH Investment & Securities. He can be reached at hwdoh@nhqv.com. -- Ed.
Unable to pay its debts, China’s Tsinghua Unigroup has filed for bankruptcy. Despite this development, China’s semiconductor boom is expected to continue. CXMT and others have begun DRAM production, and China’s level of semiconductor equipment technology is also increasing.
Tsinghua Unigroup (owner of YMTC) files for bankruptcy
Unable to pay its debts, China’s Tsinghua Unigroup has officially filed for bankruptcy. As the parent company of such semicon players as mobile processor firm UNISOC and memory play YMTC, Tsinghua Unigroup has long been a leader in China’s semicon industry. The bankruptcy, however, was not a sudden development. Since 2019, the Chinese government has reduced its support of the company, and since 2020, the firm has failed to repay a portion of its bonds.
In 2016, Tsinghua Unigroup subsidiary YMTC announced that it would build three memory fabs at 100K wpm each. Today, only one fab is currently producing (NAND, 40K wpm). YMTC utilizes a technology called Xtacking, which integrates memory cells and peripheral circuits on each wafer and attaches two wafers vertically to increase bit density.
China’s semiconductor boom to continue
Despite Tsinghua Unigroup’s bankruptcy filing, China’s semiconductor boom is expected to continue. We note that the firm’s bankruptcy is due in part to the Chinese government’s cutback of related support. Meanwhile, CXMT and GigaDevice have recently enjoyed significant attention from the Chinese government. CXMT has a DRAM fab in Hefei producing at a scale of 20K wpm. While its current process is 19nm, plans are in place to upgrade to a 17nm process in 2H21. Elsewhere, GigaDevice started mass production of 19nm DDR4 DRAM in Jun 2021.
China’s semiconductor equipment technology is also improving. SMEE is planning to release exposure equipment capable of producing semiconductors at the 28nm scale at yearend. If equipment mass-production proceeds successfully, we are likely to see the replacement of some exposure equipment imports. Zhichun Technology has shipped wet cleaning equipment applicable to the 28nm process. It is also planning to manufacture and release equipment for 14nm and 7nm processes within 2022.