China flash memory maker YMTC plans entry into DRAM market

China's top flash memory chipmaker Yangtze Memory Technologies Co (YMTC) is planning to expand into manufacturing DRAM chips including advanced versions that are used to make artificial intelligence chipsets, three people with knowledge of the matter said.

The move by the state-backed chipmaker underscores China's growing urgency to boost its capability to manufacture advanced chips after the US expanded export controls in December to restrict Beijing's access to high-bandwidth memory (HBM), a specialised form of DRAM used to make AI chipsets.

The restriction has since made the availability of HBM chips more pressing matter for China's vast AI chip industry where tech giants such as Huawei and ByteDance are developing their own AI chips, industry sources and analysts have said.

YMTC is developing an advanced chip packaging technology known as through-silicon via (TSV), which is used to stack dynamic random-access memory (DRAM) to produce HBM chips, two of the people said.

They declined to be named because the information is not public.

HBM chips are mainly produced by US-based Micron, South Korea's SK Hynix and Samsung Electronics and used to make AI chipsets that the likes of Nvidia and AMD sell.

In China, YMTC's main rival CXMT is already developing HBM chips.

YMTC is also considering allocating part of a new facility it is building in Wuhan to producing DRAM chips, one of the people said.

Earlier this month, YMTC established a new entity to build a third chip factory in Wuhan, with a registered capital base of 20.7 billion yuan ($2.9 billion), according to data from corporate registry data provider Qichacha.

YMTC didn't respond to a request for comment.

Reuters was not able to establish what the new fab’s planned monthly capacity would be or how much of it would be allocated for DRAM production.

YMTC's two existing fabs in Wuhan, which have been focusing on NAND chips, are capable of producing 160,000 12-inch wafers per month as of end-2024 and are expected to expand its capacity by 65,000 wafers this year, according to a research note by Morgan Stanley.

YMTC, which was added to the US Entity list in 2022, has played a crucial role in China’s drive for self-sufficiency in flash memory chips, for which the country had largely relied on imports from South Korea, Japan, and the US

The company is owned by a namesake state-backed holding entity.

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