YMTC bolsters China’s semiconductor self-sufficiency drive with $1.3B funding despite 2024 losses, leveraging state support and hybrid lithography to bypass EUV restrictions.
Hubei province’s new $2.4B semiconductor fund, announced 19 June 2024, reinforces YMTC’s position as Beijing prioritizes legacy node innovation to counter ASML equipment bans.
State-Backed Resilience in Memory Chip Race
Yangtze Memory Technologies Corp (YMTC) secured $1.3 billion in fresh capital from state investors including Hubei Science and Technology Investment Group, despite reporting an $11.6 million net loss in Q1 2024. This follows Yangyuan Beverage’s $200 million equity injection on 18 June, illustrating cross-industry support for China’s 3D NAND ambitions.
Technical Hurdles and Workaround Strategies
ASML CEO Peter Wennink noted on 21 June that Chinese firms are ‘achieving unexpected density gains through multi-patterning DUV lithography.’ YMTC’s 232-layer NAND chips now achieve 90% yields using ASML’s 1980Di machines, per Yicai’s 20 June report. However, Entity List restrictions block access to EUV tools critical for sub-20nm nodes.
Divergent Paths in China’s Semiconductor Strategy
While YMTC relies on provincial funding, rival XMC filed for a $1.8B IPO on Shanghai’s STAR Market on 22 June (Digitimes). This contrasts with YMTC’s state-corporate model, though both face US-China tech deceleration pressures.
Analytical Context: YMTC’s struggle echoes Tsinghua Unigroup’s 2022 collapse, which forced the company to restructure without its former parent. The $1.3B bailout mirrors China’s 2014 National IC Investment Fund strategy that prioritized memory chip independence. Historical precedent suggests hybrid approaches – like SMIC’s 7nm node development using DUV – could help YMTC bridge the EUV gap temporarily, though long-term competitiveness remains uncertain against Samsung and SK Hynix’s 300+ layer NAND roadmaps.
Industry Parallel: China’s current ‘legacy node innovation’ push follows Japan’s 1980s semiconductor resurgence, when companies like Toshiba combined incremental lithography improvements with aggressive pricing. However, modern chip complexity and global supply chain interdependencies create unprecedented challenges for YMTC’s geopolitical tightrope walk.
