In defiance of U.S. trade restrictions, China’s leading memory chip manufacturer, Yangtze Memory Technologies Corporation, is experiencing a significant surge in domestic demand for its flash memory chips, particularly from government and military-related projects.
What Happened: Wuhan-based YMTC has seen a remarkable increase in demand for its flash memory chips, now the preferred choice for local clients, especially those involved in government and military projects. This surge in demand is part of China’s broader push to reduce its reliance on foreign semiconductor products, reported the South China Morning Post.
YMTC was added to the U.S. trade blacklist in 2022.
The company’s enterprise-level NAND flash memory chip prices have surged due to strong local demand, outstripping its current production capacity.
YMTC, which is privately owned, has not disclosed its business operations and financial information. The company received a $7 billion capital injection from state-backed investors last year, but it still faces production challenges due to U.S. sanctions.
YMTC surprised the industry in 2022 when Canadian research firm TechInsights revealed that the Chinese company had developed a “232-layer NAND flash,” surpassing global giants like Micron, Samsung, and SK Hynix at that time. Just two weeks after this report, Washington added YMTC to its export blacklist, despite the company’s efforts to comply with U.S. on-site inspections.
In a statement to the Post, YMTC asserted that its technology “is not military grade nor fitted for military applications.” The company emphasized, “YMTC has never supplied its technology or products for any military use, nor have we been directed by any entity to supply its technology or products for military use.”
Additionally, YMTC stated, “We have no knowledge of any military-related project that has adopted YMTC's products.”
See Also: Biden Mulls New Restrictions On China’s Advanced AI Chips Access: Report
Why It Matters: The surge in demand for YMTC’s chips comes amid China’s increasing efforts to bolster its semiconductor industry. In May, it was reported that China’s semiconductor spending had surpassed the US, with a $142 billion commitment. This move reflects the global race to dominate the chip industry, with Western governments also making significant investments in their domestic chip capabilities.
China’s leading chip manufacturer, Semiconductor Manufacturing International Corp, has been ramping up its chip production using domestic tools to counteract U.S. export restrictions. This strategy and increasing demand for YMTC’s chips indicate a significant shift in China’s semiconductor industry.
Despite U.S. export restrictions, Chinese companies are also making strides in other areas of the semiconductor industry. For instance, Huawei Technologies Co. has introduced a new AI chip that competes with Nvidia Corp.’s A100, despite the strict U.S. export restrictions on advanced GPUs to China.
Image Via Shutterstock
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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