US considers crackdown on memory chip makers in China

WASHINGTON: The United States is contemplating limiting shipments of American chipmaking gear to memory chip makers in China including Yangtze Storage Technologies Co Limited (YMTC), according to 4 people familiar with the situation, part of a bid to halt China’s semiconductor sector advances and protect US companies.

If US Chief executive Joe Biden’s management proceeds with the shift, it could also harm South Korean storage chip juggernauts Samsung Electronics Co Limited and SK Hynix Inc, the resources said, speaking upon condition of invisiblity. Samsung has 2 big factories in China while SK Hynix Inc can be buying Intel Corp’s NAND flash memory space chips manufacturing company in China.

The crackdown, in the event that approved, would involve barring the shipment of US chipmaking tools to factories in China that produce advanced NAND chips.

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It would mark the very first US bid via export controls to focus on Chinese production of memory chips without specialised military applications, representing a more extensive view of United states national security, according to export control specialists.

The proceed also would seek to protect the only US memory chip suppliers, Western Digital Corp and Micron Technology Inc, which with each other represent about a quarter of the NAND chips market.

NAND chips store information in devices like smartphones and personal computers and at data facilities for the likes associated with Amazon, Facebook and Google. How many gigabytes of data the phone or notebook can hold is determined by the number of NAND chips it provides and how advanced they may be. Under the action getting considered, US officials would ban the export of tools to China utilized to make NAND chips with more than 128 layers, according to two from the sources. LAM Analysis Corp and Applied Materials, both located in Silicon Valley, would be the primary suppliers associated with such tools.

All the sources referred to the administration’s consideration of the matter such as the early stages, with no proposed regulations however drafted.

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Asked to discuss the possible proceed, a spokesperson for that Commerce Department, which usually oversees export settings, did not discuss potential restrictions but mentioned that “the Biden administration is focused upon impairing (China’s) efforts to manufacture sophisticated semiconductors to address significant national security risks to the United States”.

Fast-growing company

YMTC, founded within 2016, is a rising power in production NAND chips. Micron and Western Electronic are under pressure through YMTC’s low prices, as the White House published in a June 2021 report . YMTC’s expansion and low-price offerings present “an immediate threat” to Micron and Western Digital, that report mentioned. The report described YMTC as China’s “national champion” as well as the recipient of some US$24bil (RM106. 95bil) in Chinese subsidies.

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YMTC, currently under investigation with the US Commerce Division, is in talks along with Apple Inc to provide the top US smart phone maker with adobe flash memory chips, based on a Bloomberg record.

LAM Study Corp, SK Hynix and Micron declined comment on the US plan. Samsung, Applied Materials Inc, YMTC plus Western Digital Corp did not immediately react to requests for comment.

Our elected representatives acts

Tensions between China and taiwan and the United States over the tech sector deepened under Biden’s predecessor Donald Trump and also have continued since. Reuters reported on July 8 that Biden’s administration is also considering restrictions on shipments to China of tools to make superior logic chips, seeking to hamstring China’s biggest chipmaker, SMIC.

The US Congress a week ago approved legislation targeted at helping the United States compete with China by trading billions of dollars within domestic chip production.

Chipmakers that will take money underneath the measure would be prohibited from building or expanding manufacturing for certain advanced chips, which includes advanced memory chips at a level to be determined by the administration, in countries which includes China.

Based on Walt Coon of the consulting firm Yole Intelligence, YMTC accounts for about 5% associated with worldwide NAND flash memory chip production, almost double from a year ago. Western Digital stands at about 13% and Micron 11%. Coon said YMTC would be greatly hurt by limitations like those that Biden’s administration is considering.

“If they were stuck at 128, I don’t know how they would really have the path forward, inch Coon said.

Production of NAND chips in Cina has grown to more than 23% of the globally total this year from under 14% within 2019, while creation in the United States has decreased from 2 . 3% to 1. 6% over the same period, Yole data showed. For the American companies, almost all of their chip manufacturing is done overseas.

It was unclear exactly what impact the potential restrictions might have on additional players in Tiongkok. Intel, which keeps a contract to manage procedures in the factory it really is selling to SK Hynix in China, is already producing memory chips with 144 levels at the Chinese web site, according to an Intel press release. – Reuters