China's largest NAND flash corporation Yangtze Memory Technologies Co. (YMTC) is expected to strengthen its position in the global NAND flash market this year by surpassing U.S. Micron's production. YMTC is projected to increase production at its Wuhan NAND flash line, closely chasing the production of SK hynix, which ranks third in the NAND flash market.
According to data from market research firm Omdia obtained by ChosunBiz on the 15th, YMTC's NAND flash production is expected to rise from 1.21 million wafers last year to 1.51 million wafers this year. This represents YMTC's highest production capacity and exceeds the annual production of Micron, which ranks fourth in the NAND flash industry (about 1.3 million wafers). Recently, with yields secured in the 200-layer-and-above high-rise 3D NAND sector, YMTC is anticipated to increase its market share in the domestic Chinese market.
In contrast, Samsung Electronics and SK hynix are, as in last year, reducing NAND flash production this year in response to falling average selling prices. According to Omdia, Samsung Electronics, the market leader in NAND flash, is expected to decrease its annual NAND production from 5.07 million wafers last year to 4.75 million wafers this year, a reduction of about 6%, while SK hynix is anticipated to cut its production from 2.1 million wafers last year to 1.98 million wafers this year, a decline of about 5%. Kioxia (combined with Western Digital), the second-largest player in the NAND flash market, is also joining the production cut trend, while only YMTC is significantly increasing its output.
A semiconductor industry insider familiar with the Chinese market noted, "The Chinese government is offering subsidies or various benefits to companies that use domestically produced memory semiconductors to enhance self-sufficiency in semiconductors," and added, "Just as CXMT is increasing its market share in the DRAM market, YMTC is also expected to strengthen its dominance in the domestic market."
Evaluations have emerged indicating that the competitiveness of Chinese NAND has drastically improved in terms of technology and yield. According to market research firm TechInsights, YMTC has been identified as mass-producing 5th generation 3D NAND with 1 terabits (Tb) in triple-level cell (TLC) at a level of 270 layers. TechInsights confirmed this fact by disassembling and analyzing the consumer solid-state drive (SSD) of YMTC's subsidiary, Chitai.
YMTC is also solidifying its stance in high-layer NAND. The higher the layer count of NAND, the better the performance. Just like constructing high-rise apartments, as the layer count increases, more data can be stored and processed. Currently, the highest layer count among mass-produced NAND is 321 layers from SK hynix, followed by 286 layers from Samsung Electronics and 270 layers from YMTC. While still lower than Samsung Electronics or SK hynix, YMTC is closing the gap to a similar level. TechInsights assessed that YMTC has achieved significant progress with a chip size and capacity per square millimeter (㎟) of 20.47 gigabits (Gb)/㎟.
Particularly, YMTC is showing considerable technological advancement in the area of 'hybrid bonding,' which is regarded as a process with high complexity. Hybrid bonding refers to the technology that bonds two semiconductors into one. It is next-generation technology that can enhance the performance of not only system semiconductors but also memory semiconductors. YMTC is pursuing Samsung Electronics and SK hynix in the NAND flash sector by leveraging its hybrid bonding technology.
Meanwhile, the NAND market has been in a state of oversupply since the first quarter of this year. Market research firm TrendForce analyzed that the NAND flash market is facing difficulties due to oversupply in the first quarter of this year, leading to declining profitability among manufacturers as a result of continuous price drops. TrendForce stated, "This year's annual demand growth rate for NAND flash has been revised down from 30% to 10-15%".