Samsung and SK May Be Hurt
As the United States is considering restricting exports of American chipmaking equipment to China, Samsung Electronics and SK Hynix are concerned about the move's possible impact on them. Currently, Samsung Electronics has a NAND flash plant and a back-end process plant in Xian and Suzhou, respectively, while SK Hynix runs a DRAM plant in Wuxi, a back-end process plant in Chongqing, and a NAND plant in Dalian, which it took over from Intel.
Reuters reported on Aug. 1 that the Biden administration is mulling over a plan to limit shipments of U.S. semiconductor manufacturing equipment to memory semiconductor makers in China, including YMTC.
It added that the measure could also hurt South Korean memory chip juggernauts Samsung Electronics and SK Hynix.
Under the action being considered, Reuters said U.S. officials would ban the export of equipment to make 128-layer or higher NAND chips to China. In the United States, the equipment is produced by Silicon Valley-based Lam Research and Applied Materials.
The reason the U.S. is taking aim at the NAND flash industry in China is that YMTC is rapidly growing its presence in the NAND market. The global memory semiconductor market is dominated by a few companies dominate the market. Five companies -- Samsung Electronics and SK Hynix of South Korea, Kioxia of Japan, and Micron Technology and Western Digital of the United States -- occupy more than 90 percent of the global NAND flash market.
However, YMTC's market share is on a sharp rise. According to market research firm Statista, YMTC ranked sixth in the global NAND flash market in 2021 with a 4.4 percent share in terms of shipments.
Recently, foreign media outlets such as Taiwan’s DigiTimes reported that YMTC, which is currently producing 128-layer 3D NAND products, has developed a 196-layer product and is sending samples to customers.
Accordingly, the U.S. government seems to be pushing for equipment export restrictions with the intention of keeping YMTC in check and protecting U.S. chipmakers. Sources said that the U.S. administration’s review is in an early stage and regulations have not yet been drafted.
On July 29, Bloomberg reported that the U.S. Department of Commerce had sent an official letter to all semiconductor equipment makers in the United States, telling them to stop shipping to China equipment that uses manufacturing technology finer than 14 nanometers.
Last year, the United States blocked the export of extreme ultraviolet (EUV) lithography equipment to China. The ban affected SK Hynix, which sought to apply the equipment to DRAM production at its Wuxi plant in China.