WASHINGTON, Aug 1 (Reuters) – The United States is considering curbing supplies of American chipmaking equipment to China-based memory chip makers, including Yangtze Memory Technologies Co Ltd (YMTC), as part of the suspension, according to four people familiar with the matter. China’s semiconductor sector promotes and protects US companies.
If President Joe Biden’s administration goes ahead, it could also hurt South Korean memory chip companies Samsung Electronics Co Ltd ( 005930.KS ) and SK Hynix Inc ( 000660.KS ), the sources said on condition of anonymity. Samsung has two major factories in China, while SK Hynix Inc is buying Intel Corp’s ( INTC.O ) China-based NAND flash memory chip manufacturing business.
If approved, the crackdown would bar the supply of US chipmaking equipment to Chinese factories that produce advanced NAND chips.
FAST-GROWING COMPANY
Founded in 2016, YMTC is a growing force in NAND chip manufacturing. Micron and Western Digital are under pressure from YMTC’s low prices, as the White House wrote in a June 2021 report. Read also : On the United States, the United Nations Convention on the Law of the Sea and the US Freedom of Navigation – Analysis. The report says YMTC’s expansion and low-cost offerings pose a direct threat to Micron and Western Digital. The report described YMTC as China’s “national champion” and the recipient of about $24 billion in Chinese subsidies.
YMTC, already under investigation by the Commerce Department for violating U.S. export controls by selling chips to Chinese telecom company Huawei, is in talks with Apple Inc ( AAPL.O ) to supply flash memory chips to the biggest U.S. smartphone maker. Bloomberg report.
LAM Research Corp, SK Hynix and Micron declined to comment on US policy. Samsung, Applied Materials Inc, YMTC and Western Digital Corp did not immediately respond to requests for comment.
CONGRESS ACTS
Tensions between China and the U.S. over the technology sector escalated under Biden’s predecessor, Donald Trump, and have continued ever since. Read also : I am a Neuro Nurse: 10 Ways to Improve Your Brain Health Daily. Reuters reported on July 8 that the Biden administration is also considering restricting the supply of tools needed to make advanced logic chips to China in an effort to hinder SMIC ( 0981.HK ), China’s largest chip maker. read more
The US Congress last week approved legislation aimed at helping the US compete with China by investing billions of dollars in domestic chip production. read more
Chipmakers that take money under the measure would be barred from building or expanding production of certain advanced chips, including advanced memory chips at levels determined by the administration, in such countries, including China. read more
YMTC accounts for about 5% of global NAND flash chip production, nearly double what it was a year ago, according to Walt Coon of consulting firm Yole Intelligence. Western Digital is around 13% and Micron is 11%. Coon said the YMTC would be hurt by restrictions like those being considered by the Biden administration.
“If they were stuck at 128, I don’t know how they would really go,” Coon said.
NAND chip production in China has grown to more than 23% of the global total this year from less than 14% in 2019, while production in the U.S. has declined from 2.3% to 1.6% over the same period, data showed Yole data. For American companies, almost all chip manufacturing is done overseas.
It was unclear what impact the potential restrictions might have on other Chinese players. Intel already manufactures 144-layer memory chips in China, according to a contract to manage the operations of the plant it is selling to SK Hynix in China, according to an Intel press release.
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Reporting by Alexandra Alper and Karen Freifeld; Additional reporting by Stephen Nellis; Edited by Chris Sanders and Will Dunham On the same subject : Cupra could point to a potential expansion in the United States.
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