Latest US blacklist spells trouble for China’s biggest domestic 3D NAND supplier
- Reference: 1671361212
- News link: https://www.theregister.co.uk/2022/12/18/us_blacklist_spells_trouble/
- Source link:
This is based on reactions from analysts and researchers to the news [1]this week that the US Department of Commerce has placed YMTC, alongside 35 other Chinese companies, on its so-called Entity List, which requires firms on the list to receive a special license to important certain American technologies.
Short for Yangtze Memory Technologies Co., YMTC was placed on the Department's Unverified List [2]back in October as part of the White House's big move to curb China's domestic semiconductor industry by restricting exports of US-made advanced chip-making equipment. By adding YMTC to the Entity List, the US is blocking it from procuring even more supplies it needs to produce flash memory chips, unless it obtains a special license.
[3]
Analysts [4]told the South China Morning Post that being placed on the Entity List could hinder YMTC's production capabilities and its advanced memory chip capabilities.
[5]
[6]
"Adding YMTC to the Entity List will not bring down its current production completely. But it will hinder production and product development due to restricted access to US suppliers," Dan Hutcheson of TechInsights told the newspaper.
[7]US adds 36 Chinese entities to naughty list, drops 25 after checking it twice
[8]Arm processor technology caught up in US chip war with China
[9]Kioxia warns of potential cost of US chip policy over China
[10]China chip imports down 12.4% as tech trade war with US intensifies
While YMTC was only founded in 2016, TechInsights [11]recently discovered that the company had commercialized NAND flash with 232 layers, beating global rivals like Micron in the US as well, as Samsung and SK Hynix in South Korea, to the advanced memory chip technology.
The company's advanced memory chip capabilities had already been in question due to US sanctions blocking the export of state-of-the-art chip manufacturing equipment and tools, but the new Entity List action has created even more uncertainty.
Taiwanese research firm TrendForce [12]said on Friday that the Entity List decision against YMTC will create a "huge technical obstacle in the development of its latest 3D NAND flash technology," particularly with increasing the manufacturing yield of its 128-layer and 232-layer processes.
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The restrictions placed on YMTC this year by the US government has prompted TrendForce to radically adjust its projection for the company's supply bit growth rate. Originally, the firm said it expected YMTC's supply to grow 60 percent year-over-year for 2023. Now it expects a 7 percent decline over the same period.
What makes matters worse for YMTC, according to TrendForce, is that there is growing unease by NAND flash buyers outside of China to adopt its technology.
YMTC could also lose further access to advanced chip-making equipment since [14]Japanese and [15]Dutch providers may soon have to abide by US sanctions.
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All these issues combined means YMTC faces a difficult path ahead as a company, which may force it to shake up its strategy. Its potential options could include abandoning the 3D NAND flash market or pivoting to manufacturing logic semiconductors using a mature process, according to TrendForce. ®
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[1] https://www.theregister.com/2022/12/16/us_bans_companies_it_suspects/
[2] https://www.theregister.com/2022/10/07/biden_china_chips/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y59HLetm4@qu2G8CFWVwzAAAAMs&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://www.scmp.com/tech/tech-war/article/3203394/tech-war-chinas-top-flash-memory-maker-ymtc-faces-production-disruptions-potential-blacklisting?utm_source=feedly_feed
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y59HLetm4@qu2G8CFWVwzAAAAMs&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y59HLetm4@qu2G8CFWVwzAAAAMs&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2022/12/16/us_bans_companies_it_suspects/
[8] https://www.theregister.com/2022/12/14/arm_processor_technology_china/
[9] https://www.theregister.com/2022/11/01/kioxia_china_us_policy/
[10] https://www.theregister.com/2022/10/24/china_chip_imports_down_124/
[11] https://www.techinsights.com/disruptive-event/ymtc-232l-tlc-3d-nand
[12] https://trendforce.com/presscenter/news/20221216-11503.html
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y59HLetm4@qu2G8CFWVwzAAAAMs&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[14] https://www.theregister.com/2022/11/02/us_allies_china_chip_sanctions/
[15] https://www.theregister.com/2022/11/04/us_chip_industry_china_ban/
[16] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y59HLetm4@qu2G8CFWVwzAAAAMs&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[17] https://whitepapers.theregister.com/
"beating global rivals like Micron in the US as well"
Surely a completely unrelated factor in the action being taken against them.
When and how will China retaliate?
This is now very obvious it's no longer to do with national security - and as others have pointed out - everything to do with protectionism and ensuring Chinese companies don't overtake US ones.
It'll get to the point that the Chinese will be banned to do with anything tech related unless it's at least a decade or two behind what the West - or more accurately - the US offer - at which point they'll be quick to point out how old the tech they are using is.
There was a point with Japanese tech such as TVs etc (e.g. Sony, Panasonic etc) where their tech was far better than anything the West could make - I do wonder whether such a situation if it were to re-occur now - would be allowed to happen, or whether Japanese firms would suddenly be labelled as security risks. There is a possibility that Japanese companies would be allowed to continue to develop tech as the West generally gets along with companies they have - at some point in the past - entirely dominated from a military perspective - it's almost as if the mentality is "if they get too big for their boots we can beat them again in a war as we did last time"
Re: When and how will China retaliate?
They may opt to retaliate more subtle.
China sits on the majority of rare earth production. Just imagine the situation when they start to push the availability curve a bit harder.
West: We would like to buy raw material xyz.
East: Yes sir, no problem sir. We can deliver in 27 months at mega$price. For an additional giga$price we may be able to reduce the lead time to 14 months.
Re: When and how will China retaliate?
I'm sure the West would invade in such a situation - to ensure the continuity of civilisation, freedom, democracy and the rule of law of course.
They got away with it in Iraq (for oil) with no legal censure - I'm sure they'll do it again
Re: When and how will China retaliate?
I'm sure the West would invade in such a situation...
One does not simply invade China. The extremely populous country with canon-food to spare and nuclear weapons that can reach any "home". That would simply be enacting MAD.
Ah well, maybe it would be good to go MAD. Then we'd probably have solved all the long term problems of greenhouse gases, overpopulation and all other associated problems.
Re: When and how will China retaliate?
The US and UK might have been Ok with military interventions Iraq as they knew the intelligence for Saddam having WMD was actually flawed, but we have seen how the West react to a country they know has WMD's by how they have handled Russia's invasion of Ukraine. So there is no way they would risk invading China. So instead the US are basically trying to sanction China when it comes to its tech sector based on 'national security' concerns.
Too Far?
I understand the potential security problems with imported Chinese equipment but how far is Biden going to go? This is starting to look more like protectionism than technology concerns.
And we will be the ultimate losers as the US/EU alternative chip farms are still only at the "how big a grant do we get?" stage and that will make some chips scarce and more expensive.
What Biden is creating is technology inflation and he is misguided if he thinks it will support the US industries in the long term. And, in two years he could be gone with Republicans in charge again.