US officials have announced that the Pentagon has added over a dozen Chinese companies to a list established by the US Department of Defense. This list identifies entities accused of collaborating with the Chinese military.

According to the Pentagon’s website, the Department of Defense updated the list of “Chinese military companies” operating directly or indirectly in the United States, in accordance with Section 1260H of the National Defense Authorization Act (NDAA) for the fiscal year 2021.

As per a report from Reuters, the newly added companies to the list include Chinese memory manufacturer Yangtze Memory Technologies Corp (YMTC), artificial intelligence (AI) firm MEGVII, radar manufacturer Hesai Technology, and technology company NetPosa.

Reportedly, being listed on this roster doesn’t automatically impose bans, but it poses significant reputational risks for the designated companies and issues stern warnings to US entities, cautioning them about the risks associated with conducting business with these enterprises.

The list could also amplify pressure from the US Treasury Department to sanction these companies.

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(Photo credit: iStock)

In recent years, the dynamics of the memory market have undergone significant changes, with South Korean memory giants Samsung and SK Hynix facing intense competition from Chinese firms. They are experiencing heightened competitive pressures, and the technological gap is steadily narrowing.

As per reports from South Korean media outlet Business Korea, insiders in the market have disclosed that with China increasing its support for the memory industry, after several years of development, the technological gap in NAND Flash with leading global enterprises has now narrowed to approximately two years. However, in the case of DRAM, the original technological gap of about five years is still maintained.

The report indicates that the primary reason for the shortened gap is that the threshold for NAND Flash technology is relatively lower, allowing for a faster catch-up speed, and this acceleration is continuously progressing, thereby further reducing the technological disparity.

China’s largest memory semiconductor company, YMTC (Yangtze Memory Technologies Co.), officially unveiled its fourth-generation 3D TLC NAND Flash memory, named X3-9070, based on the Xtacking 3.0 architecture, at the 2022 Flash Memory Summit (FMS).

YMTC has also taken the lead over Samsung and SK Hynix by achieving production of NAND Flash memory with a higher number of layers.

It is understood that in the year 2022 alone, investments from the Chinese government and state-owned investment funds amounted to approximately CNY 50 billion. The continuous and substantial funding is aimed at supporting development efforts, encompassing both technological catch-up and faster market penetration.

The report emphasizes that as semiconductor circuit miniaturization approaches its limits, China may seize another opportunity to narrow the technological gap, particularly in advanced packaging techniques.

China, being the world’s second-largest packaging technology market, boasts a more comprehensive ecosystem. Companies like JCET, Tongfu Microelectronics Co., and HT-Tech have all secured positions in the top ten semiconductor packaging enterprises globally, while no Korean companies made the list.

TrendForce pointed out that there is indeed a technological difference of about two years between South Korean memory giants and Chinese firms. YMTC has the research and development capabilities but is primarily hindered by the lack of key equipment for mass production. The subsequent developments depend on whether China can acquire crucial semiconductor equipment. If successful, YMTC may have the opportunity to transition to higher levels, such as 300 layers, and proceed to mass production.

(Photo credit: Samsung)

Mainland China’s 3D NAND flash memory manufacturer, Yangtze Memory Technologies Co. (YMTC), filed a lawsuit against the U.S. memory chip leader, Micron Technology, on November 9th in the Northern District Court of California. The lawsuit accuses Micron of infringing upon eight of YMTC’s U.S. patents related to 3D NAND technology.

According to ICsmart, the patents involved in this case from YMTC include US10,950,623 (3D NAND memory device and method of forming the same), US11,501,822 (Non-volatile storage device and control method), US10,658,378 (Through-array contact [TAC] for three-dimensional memory devices), and US10,937,806 (Through-array contact [TAC] for three-dimensional memory devices), US10,861,872 (Three-dimensional memory device and method for forming the same), US11,468,957 (Architecture and method for NAND memory operation), US11,600,342 (Method for reading three-dimensional flash memory), and US10,868,031 (Multiple-stack three-dimensional memory device and fabrication method  thereof).

In the complaint, YMTC alleges that Micron’s 128-layer, 176-layer, and other series of 3D NAND technology have violated eight patents owned by YMTC. Micron is accused of using YMTC’s patented technology without authorization to compete with YMTC, protecting market share and impeding YMTC’s interests, thereby inhibiting innovation.

In recent years, with the stacking of 3D NAND technology reaching 128 layers and even higher, the chip area occupied by peripheral CMOS circuits may exceed 50%. To address this issue, YMTC introduced its proprietary innovative Xtacking technology in 2018.

Established in July 2016 and headquartered in Wuhan, Hubei, YMTC is an IDM (Integrated Device Manufacturer) specializing in the design and manufacturing of 3D NAND flash memory. It also provides comprehensive memory solutions.

Under the shadow of the ongoing US-China tech rivalry, Micron Technology adopted a low-key approach at this year’s Import Expo in Shanghai. During a meeting with Micron’s CEO, Sanjay Mehrotra, Chinese Minister of Commerce Wang Wentao on November 1st welcomed Micron’s continued presence and expansion in the Chinese market, emphasizing the importance of adhering to Chinese laws and regulations for sustainable development. Mr. Mehrotra expressed the company’s willingness to further invest in China.

However, on May 21st this year, China’s Cyberspace Administration announced serious cybersecurity issues with Micron’s products sold in China. These products didn’t pass the review, leading Chinese operators to halt the purchase of Micron’s products. This indicates a potential ban on Micron’s products in the Chinese market.

In October 2022, the US imposed exprt restrictions on advanced chip manufacturing equipment, including placing 36 Chinese companies such as YMTC on an entity list.

(Photo credit: iStock)

Following China’s Big Fund’s substantial $14.56 billion RMB investment in Changxin Xinqiao Storage Technology, a memory chip manufacturer, at the end of October, there are now reports of an additional $39 billion RMB injection.

China is actively building a domestic semiconductor supply chain, and according to Nikkei Asia, Changxin Xinqiao is set to utilize this funding to expedite the construction of its facility in Hefei, Anhui province, with the aim of achieving mass production within a span of three years.

Hefei is also the location of a production facility for ChangXin Memory Technologies (CXMT), a major semiconductor manufacturer specializing in DRAM production. Changxin Xinqiao shares some shareholders and its general manager with CXMT, according to Tianyancha.

Chinese media points out that Changxin Xinqiao has ambitious plans to produce DRAM chips in Hefei, destined for use in computers and a wide array of electronic devices. At present, Changxin Xinqiao has initiated the tendering process for new facility equipment and is poised to accelerate procurement and related procedures using the recently acquired funding.

With support from the Hefei City government, Changxin Xinqiao initiated the DRAM factory construction project in 2019 and laid out a policy to make use of domestically manufactured semiconductor production equipment.

(Image: CXMT)

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Report to Voice, After the release of the Huawei Mate 60 Pro, various components have begun to experience the long-lost sensation of surging demand, replenishment, and stockpiling. With the launch of the Apple iPhone 15, the once sluggish global consumer electronics market has suddenly come back to life. The current mindset among storage manufacturers is clear: regardless of whether there is a real or perceived shortage, the goal before the year-end is to raise prices until they are no longer incurring losses.

Leading storage giants have gone through a series of price drops, losses, and production reductions, and are now officially entering the “price hike” phase. Samsung, SK Hynix, Micron, and others have already expressed their intention to raise NAND Flash contract prices.

According to TrendForce latest price projection on NAND Flash, in response to persistent softening in demand, Samsung has taken a decisive step: a sweeping 50% production cut from September, with the focus mainly on processes under 128 layers. Other suppliers are also expected to follow suit and increase their production cutbacks in the fourth quarter to accelerate inventory reduction. With this maneuver in play, Q4 NAND Flash average prices are projected to either hold firm or witness a mild surge, possibly in the ballpark of 0~5%.

YMTC now is facing surging demand from both smartphone and module manufacturers. It is reported that the production capacity for the period up to 1H24 has already been fully booked, with PC and server manufacturers sharing the capacity, while module manufacturers may receive a smaller share.

The current NAND Flash market situation is such that trying to negotiate increased supply with NAND Flash manufacturers like Samsung, Micron, and YMTC may yield little new capacity, and accepting higher prices may be inevitable.

The sudden pre-sale launch of the Huawei Mate 60 Pro has undoubtedly acted as a major catalyst for the current smartphone market. Without it, many smartphone supply chain companies believed that the smartphone market wouldn’t recover until the second half of 2024, and the most pessimistic among them even doubted if it would improve by 2024. The release of the Huawei Mate 60 Pro and the Apple iPhone 15 has injected a long-awaited warmth into the global smartphone market, reinvigorating the entire smartphone component supply chain.

In recent times, the top-tier iPhone 15 Pro Max from Apple’s iPhone 15 series is expected to be available only in November, which some interpret as a sign of strong demand. However, it is more likely due to production bottlenecks, particularly related to technologies like CIS, which have resulted in limited shipments of the iPhone 15 Pro Max. Overall, the estimated shipment volume for the iPhone 15 series may still reach up to 80 million units.

Is this resurgence in smartphone demand a lasting trend with increased consumer willingness to upgrade, or is it a temporary phenomenon? Optimists and conservatives hold differing views, but what is certain is that the global smartphone shipment volume has entered a mature phase, with limited room for significant growth driven solely by new features. However, the storage capacity in each smartphone continues to increase, providing substantial opportunities for existing supply chain manufacturers.

While new opportunities like automotive and AI have emerged, there is still no demand in any new field that can entirely replace the massive smartphone market. Therefore, the consensus within the global tech industry is that for the economy to rebound, the consumer electronics sector, particularly smartphones, is indispensable at this stage. AI and electric vehicles alone cannot take the place of smartphones. (Image credit: YMTC)

(Source: https://mp.weixin.qq.com/s/cb0kRUpWU6MElLNh9CR9eA)