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The US recently added YMTC to its list of Chinese entities banned from receiving any US goods. The move also excludes government departments from buying anything containing YMTC memory chips.
Tensions between Washington and Beijing have been on the rise for some time, so the addition of YMTC made sense.
Why?
China has been at the forefront of several stages of electronics production. It started at the product assembly level and moved down the chain toward chip design and production. For example, Huawei is well known in the smartphone and network infrastructure space. Inside those products, there are competitive chip design companies like HiSilicon (a Huawei subsidiary), but these have depended on offshore foundries for cutting edge semiconductor manufacturing technology.
US trade restrictions hit HiSilicon and other chip companies too as TSMC was forbidden from supplying them. Unable to produce its own cutting edge processes and cut off from advanced foreign foundries, the future for these Chinese chip companies appears dim.
Despite a massive coordinated effort with support from the upper echelons of The Party, China was still not quite able to get domestic foundries to the cutting edge of silicon wafer fabrication. The most advanced wafer fab in China, SMIC, is currently in production on several trailing edge technologies like 28 nm that are still vital to the overall industry for mixed signal and RF applications. SMIC has an early finFET node – 14 nm – in production that is suitable for processors. Unfortunately, products manufactured on 14 nm technology would leave them uncompetitive in performance or power consumption compared with the four generations more advanced 4 nm devices from Apple, MediaTek, and Qualcomm (using wafers supplied by Samsung in Korea and TSMC in Taiwan).
China’s domestic foundry problems are long-standing and well documented. At least, that is, on the fabrication of digital processors. Memory is a different issue.
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