China’s Latest Goal—More DRAMs

A new domestic player hopes to get a foothold in DRAMs.

popularity

China is once again making a concerted effort to get its domestic DRAM industry off the ground.

Past efforts have fallen short or failed. This time around, it’s unclear if China will succeed, but the industry should pay close attention here.

So why would China want to play a bigger role in the tough and competitive DRAM business? For one thing, the U.S. and China are in the midst of a trade war. And recently, the U.S. Department of Commerce effectively banned China’s Huawei from buying components from U.S. companies by placing it on the “entity list.”

The U.S. plans to ease the restrictions, but the ban sent shock waves in China. It also prompted China to accelerate its efforts to become more self-sufficient in semiconductor design and production. That includes DRAMs.

This is a long and complicated story. It goes back several years when China launched a number of efforts to become more self-sufficient in semiconductor technology and production. For years, China has relied on foreign suppliers for its chips. And so, the nation has been plagued by a huge trade deficit in semiconductors.

Then, in 2015, China launched a major initiative called “Made in China 2025.” The goal was (and still is) to increase the domestic content of components in 10 key areas—IT, robotics, aerospace, shipping, railways, electric vehicles, power equipment, materials, medicine, and machinery.

As part of those efforts, China continues its march to design and make more of its semiconductors. For memory, though, China’s OEMs still rely 100% on foreign suppliers. Plus, Intel, Samsung and SK Hynix all have memory fabs in China, which sell into the China market.

Several years ago, China announced several major projects to shrink that gap. Among them are:
*Yangtze Memory Technology Co. (YMTC) was set up to develop 3D NAND technology.
*Jinhua Integrated Circuit Co. (JHICC) was formed to develop DRAMs and was building a new fab.
*ChangXin Memory Technology, formerly known as Innotron, was set up to make 22nm DRAMs in a new 300mm fab.

Fast forward. What’s the latest with these efforts? YMTC is supposed to ship its first product this year—a 64-layer 3D NAND device.

JHICC went under last year. In 2018, the U.S. restricted exports of equipment and software to JHICC. Then, UMC, the technology partner for JHICC, pulled out of the project.

Others haven’t thrown in the towel. ChangXin is supposedly readying its first DRAMs.

Then, in the latest announcement, China’s Tsinghua Unigroup plans to enter the DRAM business. Tsinghua is also an investor in YMTC. Actually, Tsinghua’s DRAM ambitions started in 2017, when it announced a $30 billion memory project in Nanjing, the capital of China’s eastern Jiangsu province. The goal was to make DRAMs first, then 3D NAND.

Little has happened since that announcement. Going forward, Tsinghua may look for another location for the DRAM fab, according to TrendForce.

So all told, what are China’s prospects for DRAMs?

1) A long and winding road. China’s domestic memory business has a long way to go before it gets off the ground. It’s far behind its multinational rivals in terms of technology and know-how. It also lacks IP.

2) Money doesn’t buy share. China is pouring billions of dollars into its domestic memory industry. It has little to show for it—yet.

3) Look at Taiwan. In the 1990s, Taiwan made a big effort to enter the DRAM fray. It had backing from Formosa Plastics and TSMC. Today, though, Taiwan’s DRAM players have barely made a dent in the market.

4) Let’s not dismiss China’s memory efforts—yet. It might take several attempts and time to get it right. Even becoming a niche player would be a major accomplishment in the difficult memory business.

Related Stories

https://sperlingmedia.wpengine.com/chinas-foundry-biz-takes-big-leap/

https://sperlingmedia.wpengine.com/will-china-succeed-in-memory/



Leave a Reply


(Note: This name will be displayed publicly)