The US Department of Commerce recently sent a warning to the major makers of semiconductor equipment. After forbidding the export of 14-nanometer and more sophisticated semiconductor manufacturing equipment to China, they are now focusing on memory chip production there.
According to four sources with knowledge of the situation, the US is considering limiting the sale of American semiconductor manufacturing equipment to firms making memory chips in mainland China as well as foreign memory producers there. This was revealed in a Reuters article from August 1.
Local Chinese memory chip producers like Yangtze Memory Technologies (YMTC) are to be impacted by the American crackdown policy. Additionally, the memory chip manufacturers in China of South Korean memory chip goliaths Samsung Electronics and SK Hynix may also be affected. While SK Hynix Corp. is purchasing Intel Corp.'s NAND flash memory chip manufacturing operations in China, Samsung has two sizable plants there.
If the crackdown is allowed, shipping of American chip manufacturing machinery to Chinese manufacturers producing sophisticated NAND chips would be prohibited. The action is intended to protect American businesses by slowing the growth of China's semiconductor industry.
According to data, although production in the United States decreased from 2.3 percent to 1.6 percent during the same time period, mainland China's share of global NAND chip production climbed from under 14 percent in 2019 to over 23 percent this year. Nearly majority of the chip production for American businesses is done abroad.
According to two sources, under the proposed policy, U.S. officials would prohibit the shipment to China's mainland of semiconductor machinery used to produce NAND chips with more than 128 layers. Major providers of this equipment include Lam Research Corp. and Applied Materials, both situated in Silicon Valley.
YMTC 128L Xtacking 2.0 Peripheral CMOS Die Floor-plan
What effect these possible restrictions would have on other enterprises in China is unknown. Intel, which retains a contract to manage operations in the factory it is selling to SK Hynix in China, is already producing memory chips with 144 layers at the Chinese site, according to an Intel press release.