China has seen a remarkable, record breaking surge in semiconductor equipment imports in the recent months, particularly from the Netherlands and Japan, as it braced for the latest export restrictions from U.S. and its allies. This proactive approach is seen to ensure the smooth expansion of its chip production, focusing primarily on advanced and mature process technologies not covered by Western curbs, reports Financial Times.

China's semiconductor equipment imports reached $5 billion in June and July, which is a 70% increase compared to $2.9 billion for the same period a year ago, according to the report that cites Chinese customs data. The bulk of these imports originate from the Netherlands and Japan. The spike is largely attributed to the impending export curbs set by these two nations prompting China to act swiftly to avoid potential disruptions of wafer fab equipment supplies.  

A closer look at the imports reveals that China's focus is on tools such as lithography scanners from the Netherlands-based ASML as well as etching and wafer-coating machines from Japan. These tools were shipped to recognized players like SMIC and YMTC as well as to recently established fabs supported by local Chinese governments.

Both the Netherlands and Japan recently established export limitations on chipmaking equipment, collaborating with the U.S. in an effort to slowdown development of Chinese semiconductor industry. These new measures require Dutch and Japanese companies like ASML and Tokyo Electron to secure export licenses from Dutch and Japanese authorities before shipping their advanced products to Chinese entities. Since such licenses are unlikely to be granted in a prompt manner, Chinese companies preferred to proactively procure the tools they need.

China's strategy appears clear: to sidestep any potential roadblocks in its ambitious chip production expansion plans. The equipment they're bringing in is predominantly geared towards the manufacture of less sophisticated chips, which fall outside the purview of the new Western restrictions. This ensures that China's chip production can continue unhindered despite all odds. 

China was the second largest wafer fab equipment importer in Q1 2023, according to SEMI. Chinese companies procured tools worth $5.86 billion, down 23% year-over-year and 8% quarter-over-quarter. China, Taiwan, and South Korea will continue to be the leading three regions for equipment spending in 2023 and 2024, according to estimates by SEMI.

Yangtze Memory Technologies (YMTC) has teamed up with China-based SSD brands and developers of flash controllers to market solid-state drives based on its 232-layer 3D NAND memory, reports DigiTimes. While the company does not formally have access to wafer fab equipment required to make such flash memory and cannot sell such devices to multinational drive suppliers, it can still sell in China. 

YMTC has traditionally worked with Maxio Technology, a China-based developer of SSD controllers, to design solid-state drive platforms. So it is not particularly surprising that the two companies have a platform based on 232-layer 3D NAND. DigiTimes claims that YMTC has teamed up with other China-based SSD controller firms to build drives featuring its latest memory and their chips, though it does not disclose the names of these companies.

One SSD supplier that markets 232-layer 3D TLC NAND-based drives is Tengyn. The manufacturer started to sell SSDs featuring YMTC's X3-9070 memory a couple of months ago, and since then, their prices have dropped sharply. Like in other parts of the world, there is an oversupply of 3D NAND in China, so low SSD prices are expected. Meanwhile, since YMTC has trouble selling its advanced 3D NAND memory elsewhere, it is probably willing to sell it at a discount in the People's Republic to keep its fabs busy.

YMTC's 232-layer 3D TLC NAND memory featuring its Xtacking 3.0 architecture was developed to address applications like the best client and server SSDs needing high performance and storage density. The memory devices feature a 15.47Gb/mm2 areal density, according to Yole Group, and a 2400 MT/s interface. 3D NAND devices featuring such a speedy I/O can be used to build PCIe Gen5 x4 drives that offer throughput of over 12 GB/s, and such drives are still not common.

Yet, because the U.S. government blacklists YMTC, international SSD makers are reluctant to use its advanced 3D NAND memory for their products due to possible risks.

The Chinese company Yangtze Memory Technologies (YMTC) seems to be adapting to new US sanctions realities with a rather mysterious 3D NAND product that combines a relatively low storage density with an extremely speedy interface. In addition, YMTC has once again raised prices for its 128-layer 3D NAND by about 5%, according to DigiTimes. This move comes despite the ongoing slump in the PC and consumer electronics markets in general and the 3D NAND memory market in particular and follows a previous increase in May.

Mysterious New Product

Although stringent U.S. export rules have hindered YMTC's ability to produce 3D NAND flash chips with more than 128 layers, the company is swiftly adopting alternative strategies. In particular, YMTC has initiated large-scale production of its 128-layer NAND flash chips, dubbed 'Wudangshan,' that reportedly relies on the Xtacking 3.0 architecture, according to the report.

YMTC has productized a version of 128-layer flash before with its Xtacking 2.0 architecture, but the step up to the 3.0 revision marks a significant overhaul of an existing product, which normally wouldn't take place. If true, the US sanctions, which hinder YMTC's ability to make flash with higher layer counts, have spurred the company to re-vamp its older flash with performance-boosting tech. If such 3D NAND devices exist, they may combine relatively low storage density with high performance, which could be the company's stop-gap solution before it comes up with a product that offers both high capacity and high performance. 

The key point of Xtacking is to produce a 3D NAND array and various peripheral logic on separate wafers using the most efficient memory and logic process technologies in YMTC's possession. Xtacking 3.0 introduces back-side source connect (BSSC) for the memory cell wafer, which simplifies production flow and reduces costs, according to TechInsights. YMTC developed Xtacking 3.0 for its 232-layer 3D NAND to bring together ultimate storage density (15.47Gb/mm2, according to Yole Group) and a 2400 MT/s interface, therefore offering perhaps the world's best 3D NAND.

 It is theoretically possible to add a CMOS wafer with high-speed peripheral logic to a 128-layer 3D NAND array wafer, but the question is whether it brings benefits for real-world applications because there is only so much one can do with a 128-layer process technology and 3D NAND device capacity from a costs perspective.

In fact, based on Yole Group's findings, YMTC's 232-layer 3D NAND uses string stacking to achieve 232 layers, with 128 layers on the 'first deck' and 125 layers on the 'second deck'. From a manufacturing point of view, this means that the company may simply not add the 'second deck' to get to a 128-layer 3D NAND featuring the Xtacking 3.0 architecture. But, of course, this severely hurts the storage density of the final device and its competitive position.

Yet, it could make sense for the company to produce such memory if it wants to address specific applications and/or as a stopgap before it finds a way to add the 'second deck' without using equipment that it cannot procure or service.

YMTC has not formally confirmed the very existence of 128-layer 3D NAND with Xtacking 3.0 codenamed Wudangshan, so take the information with a grain of salt though.

5% Price Hike

YMTC recently raised its unit price for a 512Gb NAND device from $1.5 to $1.6, following an earlier hike from $1.35 - $1.4 in May. This pricing strategy contrasts with international NAND suppliers who are grappling with attempts to raise prices amidst tepid customer demand. But Yangtze Memory seems to be taking advantage of its position now that Chinese government agencies cannot buy memory from Micron.

DigiTimes claims that thanks to substantial financial backing from the China IC Industry Investment Fund (the Big Fund), YMTC is seeking solutions for upstream equipment and materials. While the report does not divulge whether YMTC is seeking to use domestically produced wafer fab equipment, it is certainly a possibility.

Apparently, the company's stockpile of consumables, accumulated before the sanctions, is anticipated to sustain the mass production of 128-layer 3D NAND products for at least three more years, the report says. Meanwhile, it remains to be seen whether 128-layer 3D NAND will still be competitive three years down the road. Of course, the Chinese government may force certain organizations to only use YMTC's 3D NAND for their systems, which will guarantee stable demand, but it remains to be seen whether that demand will be significant enough to support the company economically.

Chen Nanxiang, the head of Chinese 3D NAND champion Yangtze Memory Technologies (YMTC) that got into the U.S. trade blacklist late last year, asked producers of wafer fab equipment to buy back tools the company cannot use. In his keynote speech at Semicon China conference he also warned that the global semiconductor industry is entering an era of turmoil and disarray due to increasing geopolitical tensions.  

Buy It Back

According to Bloomberg, Chen Nanxiang, chairman and CEO of YMTC, gave a speech in Shanghai, China, that directly addressed machine suppliers, and how they should buy back the legally purchased equipment and components if they cannot be used.

While many companies are slowing down spending on wafer fab equipment these days, makers of chip production equipment have huge backlogs, so selling off fab tools may not be a problem for YMTC, if it really wants to get rid of them.

YMTC got hit by the U.S. government twice last year. In October, YMTC was blocked from acquiring wafer fab equipment (WFE) with American technology necessary for producing 3D NAND with 128 or more layers as part of the broad sanctions imposed by the U.S. government on the Chinese semiconductor industry. The restrictions also oblige U.S. citizens to obtain a license from the U.S. Department of Commerce to support development or production of said memory devices in China. As a result, four prominent chipmaking tool companies — ASML, Applied Materials, KLA, and Lam Research — ceased their work with YMTC due to the requirement of obtaining relevant export licenses from the DoC.

In December, YMTC got into the U.S. DoC Entity List and can no longer procure equipment, software, and other technologies from U.S.-based companies (or other companies selling technologies developed in America) — unless the latter secure a special export license from the DoC. Such export licenses are reviewed with a presumption of denial.

As a result of the two hits, YMTC cannot obtain, install, and use the latest tools it acquired from WFE producers that it needed to make 232-layer 3D NAND, a type of memory that could power some of the best SSDs with a PCIe 5.0 interface. Furthermore, the company has troubles servicing its existing tools. Some analysts believe that Yangtze Memory might have to abandon production of 3D NAND and turn itself into maker of specialty 2D NAND or even a contract chipmaker.

Turmoil and Disorder

Chen stated that globalization is effectively dead, and the previously established rules, balance, and harmony have been disrupted. This shift is predicted to greatly impact the supply chain, industry practices, and business models. The head of YTMC believes that key aspects of globalization such as competition, innovation, and the free movement of talent and resources have been affected. 

According to reports via Nikkei, Chen believes that globalization is dead and that government interventions and that existing rules and past balances are now broken. Chen continues, stating that the semiconductor industry could see a period of turmoil. A period which could see a tremendous and profound impact on the supply chain and industry practices.

The chief executive and chairman of the troubled 3D NAND maker highlighted the importance of global cooperation in the semiconductor industry. He emphasized that the complex chip supply chain involves 25 countries and has indirect ties with another 23. 

Chen also indicated that semiconductor markets in China and the U.S. — which benefited from contributions from foreign investors and inventors — do not solely belong to their respective countries, but are global assets. Similarly, he brought example of NAND flash memory, which was invented by Toshiba in Japan back in the 1980s, and which is perfected by South Korea-based Samsung and SK Hynix.

An official statement published by the Cyberspace Administration of China (CAC) says that operators of critical information infrastructure "should stop purchasing Micron products." The decree, spotted by Wen-Yee Lee, comes after a network security review of Micron's products sold in China.

Apparently, the Chinese government security review found that "Micron's products have relatively serious potential network security issues, which pose a major security risk to my country's critical information infrastructure supply chain." However, no detail of any specific security risks presented by the usage of Micron products is given. As a matter of "national security," we assume the Micron products ban will be implemented swiftly and thoroughly.

At the end of its statement, the CAC asserts that all companies from all countries are welcome to enter the Chinese market, as long as they abide by local laws and regulations. Again, there is no hint given about how the US-based Micron has broken any regulations.

Without some detail behind its claims about Micron, it is natural to wonder whether China has a political and/or economic motivation for its ban on the firm's products. It is, therefore, worth looking at some contemporary Micron / China news to provide some context to the decision.

Firstly, let us consider the political background. The additional US trade restrictions implemented last October meant that emerging Chinese DRAM and NAND giants (Yangtze Memory Technologies Co YMTC and ChangXin Memory Technologies CXMT, respectively) have far narrower markets to address. The biggest visible fallout from the US government decision last year was when, after a period of close cooperation, Apple had to abandon plans to use YMTC NAND in its iDevices. If US sanction activity motivated China's new Micron ban, then it would be a pretty clear tit-for-tat exchange.

Another possibility is that China's industrial efforts and investments have already started to pay dividends in DRAM and NAND production. Thus the country now feels alternative supplies are adequate enough that it can shun US-based Micron's products without issues.

We also must think about how Micron may be affected by this China ban. Micron is one of the big three memory makers, but DRAM and NAND are commodity products where brands hold little cachet. Recent financials suggest that 25% of Micron's 2022 revenue was generated by sales in China. However, in a commodity market, the flow of DRAM and NAND ICs should be able to adjust quite quickly.   

There were signs that these semiconductor commodities were primed for further steep declines in 2023, but there has been a surge in positivity more recently, off the back of the interest in companies that enable/serve the AI technology sector. Thus Micron shares have seen some ups and downs in recent months, but are still up nearly 20% in the last six months, and the last five days have accounted for half of that gain. Some of the positivity behind Micron also stems from its recent substantial investment in Japan, with local government support.

At the time of writing, Micron shares have not reacted at all to the China ban in after-hours trading. As this is fresh breaking news, we can't rule out more of a reaction on Monday.

Semiconductor Manufacturing International Corp., China's largest contract maker of chips, has quietly removed 14nm fabrication technology from the list of its services on its website. The company also did not talk about advanced FinFET-based technologies at its earnings call last week, reports DigiTimes.

The U.S. government's latest export control rules prohibit Chinese semiconductor manufacturers from acquiring instruments and technologies required to produce non-planar transistor logic chips with dimensions of 14nm/16nm or less, 3D NAND chips with 128 or more active layers, and DRAM ICs with a half-pitch of 18nm or below. With similar restrictions from the Netherlands, Japan, and Taiwan set to come into effect in mid-2023, Chinese companies like SMIC and YMTC will be cut off from obtaining the equipment needed for fabricating chips on their latest production nodes, including 14nm/12nm and N+1 for SMIC, as well as 128-layer and 232-layer 3D NAND for YMTC.

Without access to advanced equipment and spare parts from suppliers like ASML, Applied Materials, KLA, and Lam Research, SMIC may be unable to build chips for its customers using its latest fabrication technologies, so it is reasonable to remove its 14nm platform from the list of its technologies.

Meanwhile, the company's shuttle services page still mentions 14nm and even states that the company regularly produces shuttle wafers using this node.

"Currently, we provide shuttle services for processes from 0.18μm to 14nm on a regular basis," a statement by SMIC reads 

Furthermore, another page at SMIC's website also mentions its 14nm capability.

"SMIC is a pure-play semiconductor foundry that provides wafer fabrication of 200mm and 300mm wafers at 0.35-micron (μm) to 14-nanometer (nm)," the description of the company's foundry solutions reads. 

SMIC has been using 14nm-class production techology since the end of 2019 at its SN1 facility. One of the 14nm SoCs the company produced is Huawei's HiSilicon Kirin 710A. However, despite technically being in mass production, it looks like 14nm volumes were so limited that the company stopped disclosing the revenue attributed to this node. Instead, it combined it with the earnings from the 28nm node, which has not been a significant revenue contributor either.

Last year, Chinese state media reported that SMIC had initiated high-volume manufacturing on its 14nm-class fabrication method at its Fab SN1 fab near Shanghai, China. That report also suggested that the company is advancing with its 7nm and 5nm-class nodes, even though it is unable to acquire cutting-edge wafer fab equipment.

Kioxia and Western Digital have revealed their jointly developed 8th Generation BiCS 3D NAND memory device featuring 218 active layers. The new IC boasts a record-breaking 3200 MT/s interface speed that will allow developers to build high-performance storage subsystems (such as the industry's fastest client SSDs) using fewer 3D NAND chips. To enable a 3200 MT/s I/O, the two companies took a page from YMTC's Xtacking book. 

The first 8th Generation BiCS 3D TLC NAND device introduced this week features a 1Tb (128GB) capacity, a four-plane architecture to maximize internal parallelism and performance, and a 3200 MT/s interface speed (which will provide a peak sequential read/write speed of 400 MB/s). Kioxia and Western Digital are the first 3D NAND makers in the world to unveil a flash memory IC with a 3200 MT/s I/O, leapfrogging competitors by 33%. 

But while building the world's fastest 3D NAND memory device is an achievement by itself, it is interesting how the two companies achieved this. Kioxia's and Western Digital's 8th Generation BiCS 3D NAND memory features an innovative architecture called CBA (CMOS directly Bonded to Array), which resembles YMTC's recognized Xtacking.  

Normally, 3D NAND cells array resides next to or on top of its peripheral circuits like page buffers, sense amplifiers, charge pumps, and I/O. Meanwhile, from semiconductor manufacturing perspective, it is not exactly efficient to make memory and peripheral logic using the same fabrication technology. The CBA and Xtacking architectures involve production of 3D NAND cell array and I/O CMOS on separate wafers using optimal production nodes, something that allows it to maximize bit density of the memory array and I/O performance. 

In addition to the industry's fastest I/O, Kioxia and Western Digital claim that their latest 3D NAND IC also boasts the industry's highest bit density, though without elaborating what bit density we are looking at. Meanwhile, it is noteworthy that the introduced 8th Generation BiCS 3D TLC NAND can work in both 3D TLC and 3D QLC modes and therefore can potentially address both high-performance/high-capacity premium client and enterprise SSDs as well as inexpensive yet fast drives for client PCs or high-density datacenter-grade storage applications. 

Kioxia stated that it had commenced sampling its 8th Generation BiCS 3D NAND memory devices with a few chosen customers. However, the company has not provided any information regarding the timeline for the start of high-volume production of its latest flash memory. Since it takes a long time for makers of flash memory and SSD controllers to mate the former to the latter, NAND producers usually reveal new types of memory well before  mass production start. That said, expect 8th Gen BiCS 3D NAND on the market sometime in 2024, although we are speculating here. 

"Through our unique engineering partnership, we have successfully launched the eighth-generation BiCS Flash with the industry's highest bit density," said Masaki Momodomi, Chief Technology Officer at Kioxia Corporation. "I am pleased that Kioxia's sample shipments for limited customers have started. By applying CBA technology and scaling innovations, we've advanced our portfolio of 3D flash memory technologies for use in various data-centric applications, including smartphones, IoT devices, and data centers."

The Japanese government on Friday officially announced a list of 23 wafer fab tools that would be subject to export controls. This decision is expected to make it more challenging for Japanese high-tech companies to export these items to China, reports Nikkei. Specifically, Chinese foundry champion SMIC and NAND memory leader YMTC will not be able to procure the equipment they need to make advanced chips.

Among the 23 items subject to Japan's export controls are all immersion lithography machines, etching equipment, tools used for chemical wafer polishing (and possibly post-CMP cleaning), and extreme ultraviolet (EUV) mask-testers, according to DigiTimes. These devices are made by ten companies, including Lasertec, Nikon, Screen Holdings, and Tokyo Electron. The updated regulation is expected to be formally declared in May and put into effect in July, so Chinese companies have at least three months to get the tools they might need.

The list of tools subject to Japanese export controls mimics restrictions imposed by the U.S. and the Netherlands against China in recent years. However, it is necessary to note that Japan does not directly name China (more on this below). The most recent export regulations imposed by the U.S. government limit the import of American tools and technologies used to create logic chips with non-planar transistors on nodes measuring 10nm/14nm/16nm or smaller, 3D NAND chips featuring 128 or more layers, and DRAM ICs with a half-pitch of 18nm or less. In addition, Amsterdam and Washington restrict tool sales that enable Chinese entities to use extreme ultraviolet (EUV) lithography.

The only company that can produce chips at advanced nodes that rely on FinFET transistors is Semiconductor Manufacturing International Corp. (SMIC). However, the company has historically focused on making chips on mature nodes and somewhat reduced efforts to build up advanced capacity after restrictions imposed by the U.S. government on equipment that can be used to build chips on 10nm-class or more sophisticated process technologies. The new restrictions by the U.S., the Netherlands, and now Japan will make it nearly impossible for SMIC to expand its 14nm capacity.

As for YMTC, it has already begun reducing its workforce after the restrictions imposed by the U.S. government in October, so the impact of the Japanese regulations on this 3D NAND maker is generally unclear.

The updated Japanese export regulation does not explicitly target China or any other specific country for regulatory measures, as Japan has a rather curious way of restricting sales of dual-use items to certain states.

Japan controls the export of certain dual-use civilian items under the Foreign Exchange and Foreign Trade Control Law. Items in the export controls list can be shipped without permission to 42 countries recognized as friendly or preferred trading partners (e.g., Singapore and Taiwan) but require an export license to be sold to countries that are not deemed friendly.  

China is not on the list of 'friendly' countries, so from now on, Japanese companies will have to obtain individual permission to sell one of the listed 23 tools to a China-based entity.

However, Japan's government believes that the impact of the new regulations will be limited.

"The targets to be covered by the export controls are not areas with large markets, and we believe that the impact on corporate performance will be limited," said a senior trade ministry official, according to Nikkei.

Although the Samsung 990 Pro has replaced it, the Samsung 980 Pro used to be one of the best SSDs around. Now, it may be close to three years old, but it's still a popular PCIe 4.0 drive that's much more affordable than its successor, so it doesn't come as a shock that there are many knockoffs on the market.

One Chinese user from the Baidu Tieba (via Harukaze5719) forums recently encountered an imitation posing as the Samsung 980 Pro. The phony drive had everything that suggested that it was legit: the Samsung 980 Pro 2TB sticker and the firmware, which later turned out to be fake. Samsung’s Magician Software confirms that it's a counterfeit drive. The software always validates whether a drive is fake or not. In the case of a fake drive, the software will refuse to manage it. When a consumer registers his Samsung SSD, the Samsung Magician software will put the "Genuine" label to the right of the drive's serial number to show that it's a real Samsung SSD.

Once the sticker was removed from the fake drive, it had all the signs of a counterfeit SSD. The SSD utilizes the Maxio MAP1602A PCIe 4.0 SSD controller, the same one that powers the Acer Predator GM7. The SSD controller comes from TSMC's 12nm process node and features a DRAM-less design. More experienced consumers know that Samsung produces and uses its SSD controllers and NAND chips in the brand's SSDs. 

In the case of the Samsung 980 Pro, the SSD employs the 8nm Elpis controller with a DRAM design. Additionally, Samsung's SSD controllers are typically larger than the competition. Regarding the NAND selection, the Samsung 980 Pro sports 128-layer TLC 3D V-NAND. The fraudulent Samsung 980 Pro drive uses YMTC's 128-layer TLC 3D NAND (X2-9060) built with the Chinese chipmaker's Xtacking 2.0 technology.

With a different SSD controller and NAND, the bogus drive obviously won't perform similarly to a real Samsung 980 Pro. According to the user-provided benchmarks, the SSD delivered sequential read and write speeds of around 4.8 GBps and 4.5 GBps, respectively, in CrystalDiskMark and up to 4.2 GBps and 3.9 GBps in AS SSD. On the contrary, the Samsung 980 Pro offers sequential read and writes up to 7 GBps and 5 Gbps, respectively, depending on the capacity. So the performance numbers on the false drive are way off.

The merchant sold fake Samsung 980 Pro 2TB SSDs on Xianyu, Taobao's second-hand market, for 880 yuan or $127.77. The drives even come in official Samsung packaging. The price alone makes it easy to see that the SSD is a sham. The actual drive currently retails for $169.99 on the U.S. market. The scammed user claims he had been out of the PC game for a while, so he wasn't up to speed on the latest technology. Furthermore, he reportedly didn't have a PC at hand, so ten days had passed before he could test the drive.

There's always an imminent risk to buying computer hardware on the second-hand market, especially in China. But even distinguished online shopping platforms, such as AliExpress or Taobao, are filled with malicious merchants ready to take advantage of less-knowledgeable consumers. These same actors have infiltrated U.S. retailers as third-party sellers. We've seen our fair shares of scam cases, like the $39 30TB portable SSD on Walmart or the $100 16TB SSD on Amazon. If something sounds too good to be true, it usually is.

According to a recent Sabrent newsletter, the company is developing a new "Rocket X5" PCIe Gen 5 SSD that has the potential to reach speeds of 14 GBps. This drive is currently in the prototyping stage, and Sabrent is determined to hit the 14 GBps transfer speed target for the finalized product if possible. If the X5 can attain that lofty mark, it will outperform all of the best SSDs on the market today.

The Rocket X5 is in the development phase right now, with Sabrent saying the name and label could change before release and the transfer rate. Effectively, Sabrent is trying to push performance as high as current SSD technology allows without other factors getting in the way.

Currently, prototype versions of the Rocket X5 are already hitting read speeds in excess of 12 GBps, exceeding the speeds offered by the first PCIe Gen 5 SSDs to hit the market. So it appears Sabrent is making good progress on achieving its 14 GBps goal, at least for now.

All PCIe Gen 5 SSD manufacturers right now are shipping products with either 10 GBps or 12 GBps transfer speeds. For those of you unaware, 14 GBps to 15 GBps is the spec limit for PCIe Gen 5 x4, and is what makes this transfer rate so incentivizing for manufacturers to hit.

The issue is related to production issues surrounding higher speed 2400MTps 3D NAND flash, which is required to hit these higher transfer speeds. Currently, none of the three 3D NAND manufacturers that make 2400MTps chips, including Micron, SK Hynix and YMTC, have been able to deliver large volumes of these chips to the market.

Technically, Micron does not have this issue. It is well ahead of SK Hynix and YMTC in both maturity and mass production, but the company has been dealing with chip yield shortages bottlenecking production. These issues should have been resolved already at the time of this writing, according to Tom's Hardware sources, but this has not been confirmed. For more details, check out our previous coverage here.

As a result, it appears there is no guarantee the Rocket X5 will hit 14 GBps whenever it launches. The drive's final characteristics will depend on Sabrent's production strategy and whether or not it wants to wait for high-speed 2400MTps NAND flash or skip it entirely and launch the drive with slower specifications.

Chinese NAND flash manufacturer YMTC has been suffering of late, with dual pressures from challenging market conditions and sanctions from the United States. While the company is secretive, rumors and industry reports suggest that YMTC is laying off as much as 10% of its staff, removing them from company housing, cutting orders for equipment, and nixing or delaying plans for a factory in Wuhan.

As ComputerBase explains, the storage industry has been in a rough spot lately, with the market for DRAM and NAND slowing with less demand after sky-high need during the worst of the pandemic. Tie that in with the fact that YMTC has been added to the United States Department of Commerce's Entity List, which has made it much harder for the mainland China-based company, backed by the government, to do business.

The situation appears quite dire for those affected by layoffs. Calxin and the Register report that affected employees were removed from their company-subsidized apartments. The South China Morning Post reports that a former worker said on Chinese social media app Zhihu that YMTC asked for more than 400,000 Yuan (approximately $59,000) in repayments for his subsidized apartment. The same employee told the SCMP that lay-offs at the company hit "almost all departments."

The DRAM and NAND crisis has hit storage makers in different ways. Samsung hasn't done much, while ComputerBase suggests Micron and SK Hynix are trying to correct the ship by making massive changes to capital expenditures. Perhaps on the bright side, PC builders have seen some incredible sales on the best SSDs.

Back in December, analyst firm TrendForce suggested that YMTC wouldn't be able to produce 3D NAND in a competitive fashion for a few years after being placed on the Entity List, and that the company would have a hard time getting wafer fab equipment and other tools from U.S.-based manufacturers, which could further stunt its growth. YMTC's spot on the Entity list could also mean that companies outside of China may choose not to work with it for fear of being associated with a blacklisted company.

Additionally, the SCMP reports that YMTC has canceled as much as 70% of its orders from Naura Technology Group, a Chinese company that makes etching, cleaning and other chemical tools for wafer fabrication, according to anonymous sources.

YMTC has long been seen as China's attempt to compete with Samsung, Kioxia, SK Hynix and other global players in the NAND market, but strong headwinds are clearly keeping that dream from becoming an immediate reality.

The Acer Predator GM7 is a fast and very efficient PCIe 4.0 SSD. In fact, it’s the most efficient SSD we have tested to date by a significant amount. The GM7's all-around performance is good to great, and its performance in sustained workloads is also quite good. The drive is also single-sided and runs cool, making it one of the best SSDs for laptops and one of the best SSDs for the PS5. The GM7 is also noteworthy for using NAND flash from the China-based YMTC fab, but it doesn't use the company's newest 232-Layer TLC flash, meaning the best might be yet to come. 

Acer’s drives are built by Biwin, a company that also supplies HP. The Predator GM7 uses a new Maxiotek controller that can push the limits of the PCIe 4.0 interface with just four channels. More interestingly, this drive also uses 3D TLC flash from YMTC, a China-based foundry. Recent political events have taken YMTC from being disruptive, with the first 232-Layer flash on the market, to a pariah, as it lost a contract with Apple and may be unable to import its flash to the U.S. This has been quite challenging for the NAND manufacturer. Our current Predator GM7 sample uses a revised version of YMTC’s 128-Layer flash, but the more performant 232-Layer variant is promised and would make for an even better drive. Competing drives will likely arrive with Micron’s 232-Layer TLC and the TenaFe TC2201 controller, but the GM7 is the efficiency king for now.

Specifications

According to the datasheet we received, the Acer Predator GM7 will be available in 512GB, 1TB, and 2TB flavors. The product’s box also lists a 4TB SKU, which would be a tall order for this drive’s budget controller. It’s technically capable of 4TB but would need 1Tb dies. Performance peaks at the 2TB model.

The 1TB Predator GM7 is rated for up to 7,400/6,300 MBps of sequential read/write performance, but the datasheet implies a future 2TB model could hit 7,400/6,700 MBps. The performance in random workloads is currently not defined, but the similar Zhitai TiPlus7100 SSD can reach up to 900K/700K in random read/write workloads, and the controller is capable of up to 1M/1M.

The Predator GM7 has a five-year warranty, and the 2TB model has a 1,300 TBW (total bytes written) endurance rating. Thus, the drives would likely have a 650TB-per-TB-of-capacity rating, but be sure to look for an official spec for the other capacity points.

The datasheet lists NVMe 2.0 support, and the controller also supports this spec revision, but the box and CrystalDiskInfo indicate NVMe 1.4 for this drive. Our model is listed as BL.9BWWR.118 on the box, and given the product naming conventions of the Acer Predator GM7000, we made some guesses for 512GB and 2TB models. 

At the time of review, the Predator GM7 was not widely available, but pricing is expected to be $49.99, $89.99, and $159.99 for the three launch capacities. This is not competitive with mid-range PCIe 4.0 SSDs like the Silicon Power UD90, which have been $74.99 or less for 1TB, but the pricing gives it a good starting point for sales against high-end PCIe 4.0 drives like the WD Black SN850X. 

Software and Accessories 

The Acer Predator GM7 does not list free Acronis cloning software on its datasheet as the Predator GM7000 does. We recommend Macrium Reflect Free for your imaging and cloning needs. For information about the drive, use CrystalDiskMark or similar software to check drive health and other data.

A Closer Look

The 1TB Acer Predator GM7 is a plain, single-sided SSD. There is a small controller with no DRAM package and two NAND packages. It is possible to populate this PCB with up to four NAND packages. It would be possible to get up to 4TB with 1Tb dies, but this drive would be best at 2TB with that flash, and possibly best at 1TB with the 512Gb dies our sample uses. The single-sided design makes it a good fit for some slim devices, like laptops.

The controller is the Maxio MAP1602A, also known as the MAP1602 or MAP1602-I. Maxio, or Maxiotek, is a spin-off from JMicron, which once made SSD controllers. This particular controller is made in the 12nm TSMC process node with an ARM Cortex-R5 architecture, distinct from the 22nm TSMC node used on the MAP1202. It is four-channel and DRAM-less, suggesting it should be very efficient. Unlike other DRAM-less PCIe 4.0 controllers we’ve tested, this one has a 2400 MT/s bus that allows it to saturate the interface. This will also make it more power efficient.

The flash is Biwin-binned and packaged YMTC TLC. Like the TiPlus7100, this drive was expected to have YMTC’s newest 232-Layer TLC but actually arrived with a stopgap variation of its 128-Layer design. The 232-Layer TLC will have six planes like Micron’s 232-Layer TLC, as seen in our Phison E26 Preview, along with independent plane operation similar to Micron’s. This flash also has a center X-decoder, like SK hynix’s 176-Layer TLC in the Platinum P41, improving sub-page I/O performance. Other changes will help bring the complexity and cost of the flash down — an area that has been an issue — and allow high die density.

The four-plane 128-Layer variation found on our review sample does not have the new Xtacking 3.0 technology and has a different 2x2 plane layout than the original 128-Layer design. YMTC’s Xtacking uses wafer-on-wafer technology to bond separate CMOS circuitry — page buffers, charge pumps, etc. — on a flipped flash array. Architectures from other flash manufacturers instead have the CMOS under the memory array. YMTC’s design reduces development time and the time to market, plus it has benefits for die density and efficiency, but it is more costly. Challenges include bonding wafers with distinct characteristics, such as different coefficients of thermal expansion (CTE), which require novel vias/plugs to handle the stress.

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Comparison Products

The Acer Predator GM7 is up against the WD Black SN850X, the Crucial P5 Plus, the SK hynix Gold P31, the Acer Predator GM3500, the Samsung 980 Pro, the Solidigm P44 Pro, and the Kingston Fury Renegade.

Trace Testing - 3DMark Storage Benchmark

Built for gamers, 3DMark’s Storage Benchmark focuses on real-world gaming performance. Each round in this benchmark stresses storage based on gaming activities including loading games, saving progress, installing game files, and recording gameplay video streams.

The Predator GM7 scores average to above-average scores in 3DMark. This is about where we would expect it to fall given its hardware — above PCIe 3.0 and older PCIe 4.0 drives, but below newer PCIe 4.0 options.

Trace Testing – PCMark 10 Storage Benchmark

PCMark 10 is a trace-based benchmark that uses a wide-ranging set of real-world traces from popular applications and everyday tasks to measure the performance of storage devices.

The Predator GM7 does a bit better in PCMark 10, managing to beat the Fury Renegade. The GM7’s fast bus helps it keep up and deliver a solid user experience.

Transfer Rates – DiskBench

We use the DiskBench storage benchmarking tool to test file transfer performance with a custom, 50GB dataset. We copy 31,227 files of various types, such as pictures, PDFs, and videos to a new folder and then follow-up with a reading test of a newly-written 6.5GB zip file.

The fast bus also helps here, with file transfers, but the Predator GM7 can’t quite keep up with newer drives like the SN850X or P44 Pro or with the Fury Renegade’s newer flash. It’s possible that with 232-Layer TLC the Predator GM7 would perform a bit better.

Synthetic Testing - ATTO / CrystalDiskMark

ATTO and CrystalDiskMark (CDM) are free and easy-to-use storage benchmarking tools that SSD vendors commonly use to assign performance specifications to their products. Both of these tools give us insight into how each device handles different file sizes.

The sequential test results for the Predator GM7 are quite good, but not record-breaking. The drive’s bus and interface speeds continue to help. This is reflected in the sequential CrystalDiskMark results, where the drive does quite well. This isn’t quite bleeding-edge performance, but you can get close to that with some cost and power savings. Performance in random workloads isn’t quite as good, although the flash may be a factor here. An upgrade to YMTC’s 232-Layer TLC would likely help a significant amount.

Sustained Write Performance and Cache Recovery

Official write specifications are only part of the performance picture. Most SSDs implement a write cache, which is a fast area of (usually) pseudo-SLC programmed flash that absorbs incoming data.  Sustained write speeds can suffer tremendously once the workload spills outside of the cache and into the "native" TLC or QLC flash. 

We use Iometer to hammer the SSD with sequential writes for 15 minutes to measure both the size of the write cache and performance after the cache is saturated. We also monitor cache recovery via multiple idle rounds.

The 1TB Predator GM7 exhibits three primary performance states during sustained write workloads: pSLC, TLC, and folding. It writes at about 6GBps for 28 seconds in pSLC for a cache of almost 170GB. This is not as fast as other drives, and the cache is on the small side, but it does well enough. TLC mode writes at nearly 2.07GBps, which is quite fast and in the vicinity of flash on other four-channel PCIe 4.0 drives like the Team Group MP44L. Folding writes at 770MBps, which, while not amazing, is also not terrible. Cache recovery appears rapid but falls back to TLC speeds in short order.

Power Consumption and Temperature

We use the Quarch HD Programmable Power Module to gain a deeper understanding of power characteristics. Idle power consumption is an important aspect to consider, especially if you're looking for a laptop upgrade as even the best ultrabooks can have mediocre storage.

Some SSDs can consume watts of power at idle while better-suited ones sip just milliwatts. Average workload power consumption and max consumption are two other aspects of power consumption, but performance-per-watt is more important. A drive might consume more power during any given workload, but accomplishing a task faster allows the drive to drop into an idle state more quickly, ultimately saving energy.

Temperatures are gauged at both idle and load states via sensor and an infrared thermometer. The typical ambient temperature is at 24C. The load state involves sustained writes at maximum speed with measurement ensuing if and until throttling is demonstrated to discover the equilibrium temperature.

Power efficiency is where the Predator GM7 shines: It is by far the most efficient SSD we have tested. This is expected as the controller is four-channel and DRAM-less and is paired with YMTC’s Xtacking flash technology. It’s more efficient than other four-channel, DRAM-less PCIe 4.0 drives we’ve tested because the faster bus allows full use of the interface to transfer files quickly. We anticipated this in previous reviews and pointed out that the TenaFe TC2201 may have similar results. However, better things are to come from newer flash and, eventually, “low-end” PCIe 5.0 controllers.

Acer markets this drive as having thermal throttling and power management for efficient heat dissipation and better laptop battery life. It’s also great for the PlayStation 5. The drive is set to throttle at a relatively high 90C initially, and with its small cache, it won’t get there with a normal ambient temperature. Our GM7 idled at 43C for the controller via infrared but never throttled even with a full drive’s worth of writes, reaching only 73C. It may benefit from a heatsink in certain environments for very specific applications.

Test Bench and Testing Notes

We use an Alder Lake platform with most background applications such as indexing, windows updates, and anti-virus disabled in the OS to reduce run-to-run variability. Each SSD is prefilled to 50% capacity and tested as a secondary device. Unless noted, we use active cooling for all SSDs.

Conclusion

The Acer Predator GM7 is the most efficient SSD we have ever tested, and it's no slouch with regard to performance. It's good to great in most benchmarks, and performance in sustained workloads is also reasonably good. The great power efficiency helps keep the drive cool, and the single-sided design makes this a great choice for laptops and the PS5. We already liked mid-range PCIe 4.0 drives with four-channel, DRAM-less, 12nm controllers as some of the best values on the market, but pushing the bus further makes the GM7 an even more impressive specimen.

Not everything is perfect, however, as pricing will require threading a needle. The GM7 and similar drives have to cost less than the highest-end drives and cannot cost much more than mid-range PCIe 4.0 alternatives. Sequential performance is not everything, so the choice of flash is also a consideration. The revised 128-Layer YMTC TLC on this drive performed well, but it could be better in some areas — such as random workloads — if Biwin upgrades the drive to 232-Layer flash. Competition is also coming in the form of SSDs outfitted with the TenaFe TC2201 controller and Micron's 232-Layer flash.

This drive is otherwise fairly easy to recommend, if you can find it. Availability is always a concern, which is complicated by the fact that the flashmaker has come under restrictions from the US government. However, we're told those restrictions won't impact this 128-Layer version of the drive, and the impact on possible future 232-Layer variants isn't quite clear yet.

Acer's warranty is solid, but you may want more substantial software support as you would have with, for example, WD's drives. However, if you're looking for a budget-leaning drive that gets you high-end-like performance with great efficiency, it's hard not to suggest the Predator GM7. It demonstrates good things to come for the SSD market and may also be a YMTC harbinger.

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Despite the flurry of PCIe 5.0 SSDs on display, Acer licensee Biwin Technology had one of the most interesting drives at CES 2023: The Acer Predator GM7 SSD armed with flash from YMTC, a China-based NAND flash chipmaker caught up in the US-China trade war. This flash maker is now on the US Entity List, meaning all imports and exports to the company have to be reviewed and approved by the US Commerce Department. However, Biwin still hopes to bring this new SSD to the US market — restrictions permitting, of course. 

YMTC may seem like an obscure company, but its revolutionary flash architecture has attracted some of the biggest names in the industry, including Apple, which reportedly qualified the flash for use in its own devices and even helped it recruit staff. Given the new restrictions, Apple has reportedly put those plans on ice, but Biwin is still plowing forward with its Acer-branded SSD. 

The flash at the center of the dispute is YMTC's 128-layer Xtacking 3.0. This flash has a unique architecture that's built by stacking two different wafers atop one another, with a lower layer using older process node tech for the logic, while a top layer uses a newer, denser process node for the memory array that actually stores the data. This design affords all sorts of performance and cost advantages, all of which make it a promising tech that poses a serious threat to the entrenched flash makers like Micron, Toshiba, and Samsung, all of whom use what we would consider more traditional designs. So naturally, it's rational to assume that the new sanctions blunt the threat. 

Biwin receives raw wafers of this flash and packages it itself, thus creating the flash packages we can see on the drive above. The flash operates at 2,400 MT/s and the maximum power consumption for the single-sided M.2-2280 drive weighs in at 5.67W. 

The drive is powered by the Maxiotek MAP1602 DRAM-less SSD controller, which is also designed in China. This controller uses Host Memory Buffer (HMB) tech and connects via the PCIe 4.0 x4 interface with the NVMe 1.4 protocol.

The 2TB Acer Predator GM7 is officially rated for up to 7,200 / 6,300 MB of sequential read/write throughput and 1 million random read/write IOPS. The 2TB drive has a 1,300 TBW endurance rating, and drives come with a five-year warranty. The drives will come in capacities of 512 GB ($50), 1 TB ($90), and 2 TB ($160).

Biwin demoed the 1TB drive at its suite at CES, and here we can see the SSD peaking at 5,671 / 4,960 MB/s of sequential read/write throughput. The drive also delivers 688,350 / 795,513 random read/write IOPS in these tests. Of course, these tests are probably with a fresh drive, so you'll have to wait for our review to see how performance shakes out. 

Pending regulatory approvals, Biwin still hopes to bring these drives to the US market but doesn't have a firm timeline for availability yet. The company will also make the drives available in other markets that might not be impacted by the sanctions. 

Samsung has increased pricing of its 3D NAND flash memory devices by 10% in the first half of December, following blacklisting of China-based YMTC by the U.S. Department of Commerce. Since some PC makers suspended their work with Yangtze Memory for now, demand for 3D NAND from other makers increased, which is why Samsung increased its quotes, according to a DigiTimes report.

U.S. politicians publicly called YMTC a threat to national security in the last couple of months after it got into the DoC's Unverified List (UVL). As a consequence, Apple decided to withhold from buying 3D NAND from Yangtze Memory even for iPhones bound to be distributed in China.

Apparently, other PC OEMs followed suit and suspended their work with the Chinese flash memory manufacturer, either because they did not want to get involved in a political scandal or because they were unsure whether YMTC could supply enough memory on time, now that it can't get tools from U.S.-based companies without an appropriate export license issued by the Commerce Department’s Bureau of Industry and Security.

As a result, demand for 3D NAND memory produced by other makers — including Micron, Samsung, and SK Hynix — increased and market leader Samsung even decided to increase its 3D NAND prices to take advantage of the situation, the report suggests.

It is unclear how Samsung's increase in contract 3D NAND pricing for 1H December will affect prices of 3D NAND in general and solid-state drives in particular. Quotes for 3D TLC memory have been stagnating for months, so a slight increase will be a positive sign for flash memory manufacturers. Meanwhile, Samsung hardly sells a lot of 3D NAND to competing SSD manufacturers, especially those companies produce some of the best SSDs out there, so we shouldn't see a significant impact on SSD prices because of Samsung's actions.

What remains to be seen is when reduced 3D NAND output by Micron, Samsung, and SK Hynix will have an actual impact on the market. TrendForce believes that since actual device manufacturers have loads of 3D NAND at hand, the impact of production cuts will not be seen in Q4 2022 and makes no projections for Q1 2023.

Yangtze Memory Technologies Corp (YMTC) won't be able to produce competitive 3D NAND memory in a couple of years after being placed on the U.S. Commerce Department's Entity List, says TrendForce. Following the sanctions, it will become difficult for the company to procure wafer fab equipment (WFE) and other goods from U.S.-based companies, hampering its bit growth. On the other hand, its partners outside of China may cease working with YMTC. 

Due to the blacklist, the U.S. DoC will review all individual transactions of wafer fab equipment, software, technologies, support services, and other goods of U.S. origin to the Chinese 3D NAND maker. Such export license applications are reviewed with the presumption of denial, so every procurement process is becoming tough and prolonged for YMTC.  

This will have a particularly drastic effect on YMTC's bit output increase as it involves procuring loads of advanced tools from various companies, including those from the U.S., Japan, and the Netherlands. Since getting new equipment from the U.S. is now arduous, YMTC will be severely constrained with its 3D NAND output increase. Furthermore, suppose Japan and the Netherlands follow the U.S. with restrictions against the Chinese semiconductor industry. In that case, it will get even more challenging for YMTC and other companies in the People's Republic to procure WFE from foreign companies. 

TrendForce initially believed that YMTC's 232-layer 3D NAND memory ramp featuring the Xtacking 3.0 architecture and other measures would uplift the company's bit output by 60% in 2023 compared to 2022. However, after the U.S. government imposed sweeping sanctions against Chinese chipmakers in October, it revised its forecast to an 18% increase. Now that YMTC is blacklisted, TrendForce believes its bit output will decrease by 7% year-over-year in 2023. 

Since it will be close to impossible for YMTC to procure leading-edge fab tools and other technologies from American companies, YMTC will lose its competitiveness due to technological stagnation, TrendForce asserts. By contrast, other 3D NAND makers will have transitioned to 200-layer 3D NAND memory by 2024 and might even start making leading-edge 300-layer 3D NAND products for the best SSDs by that time.  

If YMTC does not keep up with its peers with a 232-layer 3D NAND ramp, it will lose market share as flash memory from companies like Micron, SK Hynix, and Samsung will be more cost-effective.  

Another reason why YMTC is set to lose market share is that companies from outside of China may prefer not to work with a company in the U.S. DoC's Entity List. TrendForce claims that P.C. OEMs planning to qualify YMTC's client SSDs have 'temporarily halted the customer sampling and adoption process.' As a result, analysts believe that YMTC will be forced to focus solely on its domestic market. 

TrendForce thinks that to survive, YMTC might need to transition to making specialty 2D NAND flash or even transform into a contract maker of chips focusing on mature fabrication processes. 

The U.S. government is set to add China-based 3D NAND maker YMTC to the Department of Commerce's "Entity List" this week, along with dozens of other high-tech companies from the People's Republic, according to a report by DigiTimes. Companies on the Entity List will not be able to procure equipment, software, and other technologies from American companies— unless the latter obtain a special export license from the DoC. 

As a maker of 3D NAND, YMTC already faced problems created by the U.S. government's sweeping sanctions against Chinese semiconductor sector. YMTC is already unable to procure American wafer fab equipment (WFE) to make 3D NAND with 128 or more layers. As a result, four leading U.S. makers of chipmaking tools have already stopped working with YMTC, as they must get appropriate export licenses from the Department of Commerce.  

Being placed on the Entity List creates further difficulties for YMTC, as it will now also lose access to all kinds of wafer fab equipment that is made in the U.S. or that contains American IP (including tools for inspection), software, and other technologies.  

The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce added Yangtze Memory Technologies Company along with 30 other entities to the Unverified List (UVL) in early October as it could not identify bona fides (end users) of their products and whether said bona fides were involved in boosting China's military capabilities. 

Once a company is placed on the UVL, it has 60 days to prove its products do not break any export regulation rules. This usually means the company must allow the U.S. DoC to conduct inspections and verifications. If the checks are unable to be completed to the U.S. DoC's satisfaction, the company is then placed on the Entity List.

Although the Chinese government appeared to relent last week, allowing U.S. export control to inspect several entities (including YMTC), these checks take some time. It looks like they haven't been completed yet, and so YMTC and the other companies will be placed on the Entity List for the time being. 

The Entity List is essentially a blacklist, and getting blacklisted is a big deal, because YMTC will lose access to all American technologies subject to regulations. When Huawei and its subsidiaries were placed on the Entity List, they lost access to software and hardware that used any technology designed in the U.S., including (but not limited to) electronic design automation (EDA) software used for chip design, as well as chips produced by TSMC. This significantly constrained Huawei's ability to develop its system-on-chips, and almost eliminated its ability to make them in volume. 

Now, YMTC and 30 other Chinese companies will face the same issues as Huawei — and only time will tell whether all of them will be able to survive without access to American technology. 

YMTC has begun shipments of its Zhitai TiPlus7100 SSDs based on its latest 232-layer 3D NAND Xtacking 3.0 memory with a 2400 MT/s interface, ITHome reports. This confirms that YMTC's latest 3D NAND memory — which is required to produce SSDs with a PCIe 5.0 x4 interface that fully saturate this interface and hit a 12.4 GB/s sequential read speed — is now in mass production.  

YMTC's Zhitai TiPlus7100 are M.2-2280 PCIe 4.0 x4 drives designed to combine affordability with strong performance. The SSDs are to be available in 512GB, 1TB, and 2TB versions with the speediest rated for a sequential read speed of up to 7000 MB/s as well as a sequential write speed of up to 6000 MB/s. 

When it comes to random performance, then 1TB and 2TB models are set to offer up to 900K random read IOPS as well as up to 700K random write IOPS. The TiPlus7100 drives do not carry any SDRAM buffer and uses a host memory buffer, which is an indicator that we are dealing with a reasonably priced product. Meanwhile, these drives can easily challenge the best SSDs available today. 

YMTC does not disclose what controller it uses for its Zhitai TiPlus7100 SSDs, but the main point about these drives for us is that they use the company's 1Tb X3-9070 chips — 232-layer six-plane 3D TLC NAND memory devices with a 2400 MT/s interface and the company's proprietary Xtacking 3.0 architecture.  

The 1Tb X3-9070 device not only boasts a bit density of 15.03 Gb/mm^2 (as revealed by TechInsights), which by far exceeds the bit density of 1Tb 3D TLC NAND memory ICs with less than 200 layers, but it also features an ultra-fast 2400 MT/s interface.

Earlier this week, Micron introduced its Micron 2550 drives based on its 232-layer six-plane 3D TLC NAND devices that is said to have a 14.6 Gb/mm^2 bit density, which outstrips YMTC's 232-layer 3D TLC ICs in terms of bit density. Meanwhile, Micron's ICs currently shipped have a 1600 MT/s interface, which is good enough for mainstream drives, but not good enough for ultra-high-performance SSDs with a PCIe 5.0 x4 interface.  

Therefore, while YMTC is not the only company to mass produce 3D NAND with over 200 layers, it is the first company that is mass-producing memory with a 2400 MT/s I/O. This is not going to last long though as Micron plans in initiate production of 232-layer 3D NAND with a 2400 MT/s interface in early 2023.

The U.S. administration says that the Chinese government allowed U.S. export control inspections of People's Republic's high-tech companies that were placed on its Unverified List in October, according to a report from the Financial Times. This move seems designed to ensure that Chinese 3D NAND company YMTC does not get placed on the Department of Commerce's "Entity List," which would severely damage the company's ability to procure equipment from American companies.  

YMTC and a number of Chinese high-tech companies were placed on the Unverified List in early October because the U.S. government could not verify whether their products (or products made using their products) ended up in the hands of China's military. Once a company is placed on the Unverified List, it has 60 days to prove its products do not break any rules. If the company cannot prove this within 60 days, it is placed on a trade blacklist called the "Entity List" and, in the case of YMTC, is denied the use of any American technology.

Normally, the Chinese government refuses to allow U.S. export controls inspectors access to domestic companies. However, the government made an exception in the case of YMTC and some other firms from Tianxia, most likely because YMTC, and the semiconductor industry in general, is so essential for the country. 

"We are seeing better behavior," Alan Estevez, the US commerce under-secretary for industry and security, said to the Financial Times. "Mofcom has been more forthcoming. […] We are seeing a change in attitude. It’s not the first time we’ve seen a such a change in attitude, so it depends on how long that is sustained."

It's too early to guess what the U.S. export controls inspectors will find, but at least YMTC won't be blacklisted — for now. That said, four leading U.S. makers of wafer fab equipment have already stopped working with YMTC due to the latest export rules imposed by the U.S. government in October, as they needed to get appropriate export licenses from the Department of Commerce. 

If YMTC doesn't get blacklisted and can prove it doesn't supply products for military use, perhaps it will be easier for companies like Applied Materials, KLA, and Lam Research to obtain approval from the U.S. government to continue working with the 3D NAND maker. 

It is claimed that Apple has quietly decided to ditch its plans to use NAND flash storage supplied by China’s Yangtze Memory Technologies Corp (YMTC) in upcoming iPhones. A report shared by Taiwan’s DigiTimes claims that Apple are looking to Samsung rather than YMTC, as the Chinese NAND supplier is expected to be officially blacklisted by the US in December, in a new wave of tech sanctions.

From the industry sourced report (so take the news with a pinch of salt) we understand that Apple intended to limit the use of YMTC flash storage chips to iPhones sold into the China market. This would mean approximately 10% of iPhones would use the YMTC NAND, while the rest of the world would have mainly bought iPhones packing Kioxia and SK hynix NAND. The extra supply from YMTC would help Apple keep its component prices down, and provide a buffer to any industry issues that arise from time to time (fires, earthquakes, flooding, pandemics etc).

YMTC’s loss is Samsung’s gain, according to the insiders talking to DigiTimes. The South Korean electronics giant is already a major supplier of DRAM for iPhones, but next year it will start to supply its 128 to 176 layer NAND to Apple, via its Xian (China) plant. Incidentally, Samsung Xian outputs 40% of Samsung total NAND shipments, and unlike Kioxia and SK hynix Samsung has made no announcements about lowering its flash storage capital expenditure. Perhaps it expected Apple to have a change of heart.

We reported on the budding relationship between Apple and YMTC back in September, but now it looks like the buds have been killed off by the first frosts of winter. As outsiders, we don’t know how much Apple could have saved with its move to Chinese NAND for Chinese iPhones, but the market is quite sluggish in Q4 2022, with Micron the latest big supplier trying to tickle prices upwards by constraining its output.

A couple of further interesting news morsels, regarding YMTC, are shared by DigiTimes. Firstly, it says YMTC was projected to grab 20% of the world’s NAND flash market if it wasn’t for impending sanctions. Secondly, the sanctions will bite into YMTC’s progress; it currently produces 128-layer NAND flash in China, but progress to the planned 232-layer NAND has been seriously hampered by chip machinery makers obeying sanctions.

With sanctions and related trade barriers being erected, suppliers to Chinese businesses and internal China chip businesses have been working on alternative ways to progress. For example; we recently reported on node tuning developments in China, and Nvidia is side stepping a chip performance sanctions with a reconfigured A100 GPU called the A800.

When the U.S. government imposed sweeping sanctions against Chinese semiconductor and supercomputer sectors in October, the global semiconductor industry immediately lost some $240 billion in stock valuation. As the new quarterly reports cycle kicks in, we're learning how much revenue American companies will lose because of the new rules. The numbers are staggering, but they will not kill these firms. Furthermore, according to Applied Materials, a major maker of fab tools, Chinese companies can tune their process technologies to circumvent the new rules slyly. 

"We expect some customers may decide to change their plan or change their technology, so it does not go above the threshold that is affected by the rules at this point," said Brice Hill, the chief financial officer of Applied (via SeekingAlpha).

A Way Out for Chinese Semiconductor Sector?

The latest U.S. export regulations restrict the import of American tools and technologies that can produce logic chips with non-planar transistors on 14nm/16nm nodes and below, 3D NAND with 128 or more layers and DRAM memory chips of 18nm half-pitch or less. These are all fairly advanced process technologies widely used today and require tools from U.S. companies such as Applied Materials, KLA and Lam Research.  

To ship wafer fab equipment (WFE) that falls under the new rules, U.S. fab tools producers, as well as companies that produce equipment containing American technology, must obtain an export license from the U.S. DoC. License applications are set to be reviewed with a presumption of denial, so when companies like Applied reveal the 'impact numbers,' they presume that the DoC will not approve any shipments to Chinese companies like SMIC and YMTC. 

Applied Materials stresses that some of its customers might adjust their process technologies to avoid the new regulations. For example, while Applied does not explicitly say it, we could speculate that SMIC could possibly come up with a 17nm fabrication process, whereas YMTC could reduce the number of active 3D NAND layers in its chips.  

"There are some customers that we are trying to clarify that we can apply for licenses for or we can get authorizations for once they establish that their technology is within the guidelines," said the CFO of Applied during the company's recent conference call. "On the other side, we expect some customers may decide to change their plan or change their technology, so it does not go above the threshold that is affected by the rules at this point." 

However, the development of such nodes and validation/qualification by customers will take some time, so do not expect this avenue to work in the short term future. 

For example, going from 14nm to 17nm will require SMIC's customers to change their existing designs significantly to hit specific performance and power targets on a thicker node. Furthermore, lower transistor density will mean bigger die sizes, which affects costs, yields and even packaging dimensions. Therefore, we expect SMIC's current clients with 14nm-class designs to continue using the node and the company's services while the foundry can provide them. Meanwhile, a hypothetical 17nm node (assuming it makes financial sense) might be used for entirely different designs. Of course, all the assumptions about SMIC's hypothetical 17nm node are merely speculative. 

For 3D NAND maker YMTC, things are also extremely complicated. The company's 128-layer 3D NAND devices correspond to a very specific 3D TLC or 3D QLC capacity, So just switching some layers off will affect the economic feasibility of these devices. While 3D NAND makers have some freedom with the number of active layers and capacity, their devices are qualified 'as is' by developers of SSD controllers and actual drives. Adoption of devices configured differently is a lengthy process, so, again, YMTC will keep supplying components that it can produce while it can. 

All in all, while many things are theoretically possible (as at the end of the day, neither SMIC nor YMTC wants to write off billions of dollars worth of equipment), they are costly, and they cannot be implemented overnight.

10% of Revenue

Applied Materials, a major producer of wafer fab equipment, this week said that the U.S. sanctions against the Chinese semiconductor industry that prohibit it from supplying its advanced tools to its clients in China would cost it $2.5 billion of revenue in fiscal 2023, or 10% of the company's revenue of $25.79 billion in FY2022. The company will keep trying to get appropriate export licenses from the U.S. Department of Commerce. 

"We currently expect that the unmitigated revenue impact of the new rules could be up to $2.5 billion in fiscal 2023," said Brice Hill, the chief financial officer of Applied. "We continue to work through the regulatory requirements, including seeking licenses and approvals where appropriate. We hope to reduce the revenue impact by between $500 million and $1 billion to a net impact of $1.5 to $2 billion."

Impact Already Hits

Applied's results for the fourth quarter of fiscal 2022, which ended on October 31, have already been impacted by the new regulations. 

"In Q4, the new rules reduced our Semi Systems and AGS revenue by approximately $280 million, which was in the range of our expectation on October 12th," said Hill. "In Q1, we expect the new rules to reduce Semi Systems and AGS revenue by approximately $490 million combined and reduce our gross margin by around one percentage point – both on an unmitigated basis."

KLA Assesses the Impact

KLA, another major WFE producer from the U.S., said in late October that its earnings would be impacted by the new U.S. export rules. 

"Specific to KLA, while a meaningful amount of our business in China is focused on legacy node investment, which is not the focus of the recent export restrictions, our systems and service revenue will be adversely impacted going forward as we are unable to provide systems and support to certain customers for certain end uses," a statement by KLA reads. "We are assessing the broader implications and engaging collaboratively with the U.S. government to provide the necessary information about our products and services to fully determine the impact on our business operations moving forward."

While in general Chinese chipmakers struggle to successfully rival established players, there are a few exceptions. YMTC (Yangtze Memory Technology Co.) is perhaps the most widely known one, a 3D NAND memory manufacturer that successfully competes against offerings from well-known producers. But to become competitive, The New York Times reports that YMTC received support from an unexpected ally, Apple.

Apple assisted YMTC in hiring engineers from established Western companies in order to improve its yields and productivity, according to the NYT report that cites three people familiar with the matter. So far, neither Apple nor YMTC have confirmed or denied the information, though the California-based consumer electronics giant is known for helping its manufacturing partners to build their operations.

YMTC's 3D NAND devices use the company's unique Xtacking architecture. That consists of two separate wafers bonded together to build ultra-dense and ultra-fast flash memory devices that can power the best SSDs.

With Xtacking, one wafer is used to produce NAND memory arrays leveraging the most efficient 3D NAND process technology that YMTC can design. Then a second wafer is used for various peripheral logic made on the company's most efficient logic process technology. Once the memory arrays and logic are connected using metal TSVs (through silicon vias), the resulting NAND can offer the best of both worlds: ultra-dense memory arrays and a very fast interface.

YMTC's rivals produce memory arrays and peripheral logic on the same wafer, which makes it harder for them to push their interface speeds to the limits. That in turn constrains performance of client-grade PCIe 5.0 x4 SSDs.

Making 3D NAND the way YMTC does is somewhat harder than making memory using traditional methods employed by Kioxia and Western Digital, Samsung, SK Hynix, and Micron. YMTC's 3D NAND suffered from low yields (according to media reports) and a slow ramp up, so apparently Apple helped the Chinese companies to hire engineers from reputable manufacturers to fix its issues.

For Apple, which uses 3D NAND across the vast majority of its products, it's important to diversify its supply as it helps to get better prices from each manufacturer. Helping YMTC to ramp up production means there will be more 3D NAND devices to choose from, at lower prices. Meanwhile, now that the U.S. administration has imposed severe sanctions against Chinse semiconductor and supercomputer industries, it looks like Apple no longer plans to use YMTC's 3D NAND even for its products bound to be sold in China.

YMTC became widely known by the general public after it was included in the U.S. Department of Commerce's Unverified List in early October. The U.S. DoC's UVL includes entities whose bona fides (end users) could not be identified "satisfactorily for reasons outside the U.S. Government's control." If YMTC cannot prove to the DoC that its memory is not used by the Chinese military or security forces within 60 days after inclusion into the list, the DoC can include the company in its entity list. That would require American companies to obtain a special export license to sell their products to YMTC.

Meanwhile, four leading makers of wafer fab equipment have already ceased working with YMTC due to the latest export rules imposed by the U.S. government in October. We've reached out to Apple and YMTC for comment and will update if we receive any further details.

Yangtze Memory Technologies Co. (YMTC) on Friday denied that it met with Chinese government officials to discuss the impact of U.S. sanctions against supercomputer and semiconductor industries. The company called the information false and rumors but neither confirmed nor denied the meetings took place.  

YMTC claims that it never participated in such closed-door meetings and the information about such participation damages its reputation. 

"The above remarks about our company published by relevant media are not true," YMTC said in a statement. "In the face of rumors, YMTC has always insisted that those who clean up will themselves clean up. However, in the current situation of major changes in the market environment and industrial environment, the above-mentioned sinister and false statements will not only damage the corporate image of YMTC, but also have a serious negative impact on the semiconductor industry environment at home and abroad." 

Bloomberg reported on Thursday that China's Ministry of Industry and Information Technology (MIIT) had summoned executives from the country's leading semiconductor and supercomputing companies, including Sugon and YMTC, to discuss the effects of sweeping U.S. sanctions against Chinese high-tech industry on their businesses. The agency said that the government promised to support affected companies financially but did not present any plans for how the effects of the sanctions that essentially bar China from the global semiconductor supply chain can be relieved. 

While we cannot verify whether the closed-door emergency meetings took place and whether YMTC executives participated in them, we can make some guesses about the situation based on the publicly available details. 

YMTC is a subsidiary of government-controlled Tsinghua Unigroup, founded in collaboration between Tsinghua Unigroup, China's national 'Big Fund' aimed to develop the semiconductor industry in the country, and Hubei provincial government. Given YMTC's close ties with government-controlled organizations, the MIIT could hold a meeting with executives of Tsinghua Unigroup, who could talk on behalf of its subsidiary to the government. However, in this scenario, YMTC executives did not need to participate in any meetings. 

While this assumption makes sense, YMTC would prefer not to be associated with the Chinese government (or rather with the Chinese Communist Party) in any way at the moment. Although Yangtze Memory must secure wafer fab equipment from American companies to keep operating, it will also have to procure more advanced fab tools to ramp up production of its next-generation 3D NAND memory featuring the Xtacking 3.0 architecture with ~200 layers and a 2400 MT/s interface speed. 

Meanwhile, to sell equipment to YMTC, U.S.-based companies like Applied Materials, KLA, and Lam Research will need to get an appropriate export license from the U.S. Department of Commerce, which will review applications with the presumption of denial. To that end, any publicity that associates YMTC with the People's Republic's government (which means CCP) is damaging for the company.

"YMTC a commercial company that adheres to the concept of globalization, marketization and compliance operation," the statement from YMTC reads. "Since its establishment, it has always adhered to the principle of legal and compliant operation worldwide. In the future, we will also adhere to the original aspiration and adhere to the principle, and actively seek the path of development under the current changes in the external environment and situation." 

Besides refuting participation in closed-door meetings with government officials and stating that it is a commercial company that adheres to principles of globalization, YMTC also threatened to take legal action against publications, journalists, organizations, and individuals who reported, re-reported, or forwarded the original Bloomberg story.

China's Ministry of Industry and Information Technology (MIIT) has held talks with the country's semiconductor and supercomputer companies in a bid to assess the impact of sweeping U.S. sanctions against Chinese high-tech industry which came into effect last Tuesday. The government vows to financially support affected companies, but without plans on how to alleviate the effects of sanctions that bar select Chinese companies from U.S. technologies. 

Officials from the MIIT summoned executives from various semiconductor and supercomputer companies, including 3D NAND memory maker Yangtze Memory Technologies Co. and supercomputer maker Dawning Information Industry Co. better known as Sugon, to discuss the impact of American sanctions against China's chip and supercomputer sectors, reports Bloomberg. 

Many Chinese high-tech companies, including Huawei, Inspur, Sugon, and ZTE have historically relied on government-funded projects for growth, whereas chipmakers like Semiconductor Manufacturing International Co. and Yangtze Memory have both received investments from government-controlled funds and sold products to local companies. Sources with knowledge of the matter told Bloomberg that domestic IT market will provide sufficient demand for affected companies. The question is whether they can fulfil that demand. 

Both Sugon and YMTC were essentially eliminated from the global semiconductor and semiconductor production supply chains after the U.S. administration imposed sweeping sanctions against China. Sugon has been in the U.S. entity list since mid 2019 and therefore it cannot procure high-performance computing chips from American companies unless the latter get an appropriate export license from the U.S. Department of Commerce (DoC).  

Meanwhile YMTC cannot procure advanced American chipmaking tools to make 3D NAND with 128 or more layers. Furthermore, YMTC has been added to the unverified list (UVL) and unless the U.S. government specialists or auditors cannot verify that YMTC's products are not used by Chinese entities with military ties within 60 days, the 3D NAND maker gets into the entity list. Once YMTC is on the list, U.S. chip toolmakers as well as all companies that sell products or services featuring American technology will have to get an export license from the DoC to deal with YMTC. If the license is not granted, the company will be left without the necessary wafer fab equipment (WFE). 

Chinese high-performance computing (HPC) chip designers like Biren are not yet affected by the sanctions and the company can produce as many chips at it needs at Taiwan Semiconductor Manufacturing Co. (TSMC). However, the U.S. administration has enough tools to curb Biren's operations. 

In addition to restricting U.S. chip toolmakers to supply advanced WFE to Chinese companies, the U.S. government also restricted the ability of U.S. persons to 'support the development, or production, of ICs' at select PRC-located fabs without a license.

**Updated 10/21**
YMTC has denied any involvement in closed-door talks with Chinese government officials over U.S. sanctions.

Apple has seemingly cancelled its plans, which we reported in September, to source 3D NAND chips from Chinese manufacturer YMTC (Yangtze Memory Technologies Corp). The move, per an article on Nikkei Asia, comes following political pressure from the U.S. government.

The story, which cites ‘multiple sources’, claims Apple’s deal has fallen foul of U.S. export controls imposed on China, despite the lengthy certification process for the 128-layer storage chips having been completed. The chips, described as the most advanced yet produced by a Chinese foundry, still lag behind those from Samsung and Micron but are noticeably cheaper as they’re subsidized by the Chinese government.

While the plan was for the China-sourced flash to be used in iPhones for the Chinese market, one of Nikkei Asia’s sources said the Cupertino-based phone company was considering populating up to 40% of the flash storage in all iPhones with the YMTC 3D NAND. No YMTC products have yet appeared in Apple’s hardware.

The move that triggered the cancellation was the October 7 placing of YMTC on the Unverified List, a non-punitive measure that means that the US Bureau of Industry and Security “or federal officials acting on BIS's behalf cannot verify the bona fides (i.e., legitimacy and reliability relating to the end use and end user of items subject to the EAR [Export Administration Regulations]) of such persons because an end-use check, such as a pre-license check (PLC) or a post-shipment verification (PSV), cannot be completed satisfactorily for reasons outside of the U.S. Government's control,” according to Subtitle B, Chapter VII, Subchapter C, Part 744 of the appropriate Title 15 federal regulations. 

What this means is that, while Apple could still import completed chips from YMTC, it is banned from exporting any know-how for making them or sharing designs and technologies without a special license.

The Unverified List should not be confused with the Entity List, which contains people, companies and even states involved in "activities sanctioned by the State Department and activities contrary to U.S. national security and/or foreign policy interests," which contains Huawei as of May 2019, or the Specially Designated Nationals and Blocked Persons List, which targets US-designated terrorists, the officials and beneficiaries of certain authoritarian regimes, and international criminals. YMTC is none of those things.

Neither company involved has commented on the matter. However, a senior U.S. Commerce Department official told Nikkei Asia that companies added to the Unverified List are ‘likely’ to be added to the Entity List if they cannot provide the necessary verification information within a certain period of time, often 60 days.

Four leading makers of chip production equipment have ceased sales of new tools and provide support services of installed tools to China-based Yangtze Memory Technologies Co. (YMTC) due to new export rules that came into effect on Wednesday. To sell new equipment to YMTC and support existing machinery, the toolmakers must get a technology export license from the Department of Commerce’s Bureau of Industry and Security (BIS). 

U.S.-based Applied Materials, KLA, and Lam Research have ceased supplying equipment to produce 3D NAND memory with 128-layers or more to YMTC under the latest export rules that impose new license requirements for semiconductor production equipment destined for China starting October 12. However, they will continue to supply new equipment and tools to multinational corporations that produce chips in China — Samsung, SK Hynix, and TSMC — for a year without a license. Yet, all export license applications to supply tools to Tsinghua Unigroup-controlled YMTC require review with a presumption of denial. Tsinghua Unigroup is a government-controlled organization.

For the same reason, ASML, which is in the Netherlands, told its U.S. employees to stop ‘servicing, shipping or providing support to any customers in China until further notice,’ according to a Bloomberg report. 

While Applied, KLA, and Lam Research ship metrology, etching, deposition, inspection, and die sorting tools to Yangtze Memory, ASML sells the Chinese 3D NAND maker crucially important lithographic scanners. While formally, lithography tools used by YMTC are not as advanced as tools used by logic or dynamic random access memory (DRAM) producers and theoretically should not fall under the new licensing requirements, ASML prefers to assess the new export rules and ensure that it complies with the new regulations. 

YMTC attempted to procure all equipment and spare parts it could from its American partners in China in the recent weeks and days to keep producing 3D NAND without disruptions to meet the demands of its clients, which reportedly include Apple. While it probably acquired all manufacturing equipment and spare parts it could (although nobody has confirmed or denied this), its main challenge now is to install and deploy new tools and parts. The new export restrictions imposed by the U.S. government also include services. As a result, ASML, Applied Materials, KLA, and Lam Research employees cannot assist YMTC, as well as other Chinese chipmakers, which means that they cannot install new tools or replace faulty components. 

Whether YMTC’s engineers at its fab are qualified to service equipment produced by companies from the U.S. and the Netherlands is unknown. However, for now, the 3D NAND bit supply from YMTC is secure, according to DigiTimes. 

Meanwhile, if YMTC’s employees cannot deploy new tools and fix production tools, sooner or later, YMTC will have to scale down or even cease production of 3D NAND memory. The latter is unlikely to happen as the company will struggle to survive. Still, without support from toolmakers, it will get much harder to maintain YMTC’s production facilities. 

It is noteworthy that YMTC was getting ready to ramp up its next-generation family of six-plane 3D NAND chips featuring the company’s Xtacking 3.0 architecture with ~200 layers and a 2400 MT/s interface speed. These chips could eventually enable some of the best SSDs, but we are not sure whether YMTC will be able to get the right tools to produce such memory devices.

Taiwanese semiconductor manufacturing prowess might be one reason for China to invade the island and seize fabs belonging to Taiwan Semiconductor Manufacturing Co., United Microelectronics Corp., and Micron. One of the potential responses to such a plan could be evacuating personnel and destroying the fabs, suggested Parameters, a top U.S. army publication recently. But this might be unnecessary, according to Taiwan’s National Security Bureau.

To build chips using leading-edge process technologies, TSMC needs leading-edge chip production equipment from companies like ASML, Applied Materials, and KLA. Even if China invades the island and seizes TSMC’s fabs without access to advanced equipment and ultra-pure raw materials, it will be impossible for China not only to keep developing leading-edge manufacturing nodes but to keep production on current technologies uninterrupted.

“TSMC needs to integrate global elements before producing high-end chips,” Chen Ming-tong, director-general of Taiwan’s National Security Bureau, told Taiwanese lawmakers this week, reports Bloomberg. “Without components or equipment like ASML’s lithography equipment, without any key components, there is no way TSMC can continue its production. […] Even if China got a hold of the golden hen, it won’t be able to lay golden eggs.”

China’s slowing economy, tensions with the U.S., and internal political battles in recent years increased the probability of China’s invasion of Taiwan to seize the island, get a hold of multiple world-class technologies, and improve the approval rating of Xi Jinping. But probability does not mean certainty. China must maintain relationships with the United States and the European Union, its two key trade partners. Furthermore, without access to manufacturing tools and technologies designed in America and Europe and without money from trade partners, China’s occupation of Taiwan might turn into a Pyrrhic victory.

New Export Rules

The U.S. sanctions against China’s supercomputer and semiconductor sectors prove relatively efficient. Late last week, the Department of Commerce’s Bureau of Industry and Security (BIS) published new export rules that impose new license requirements for semiconductor production equipment destined for China starting October 12.

Under the new rules, U.S. companies must obtain a license from the U.S. DoC for tools that can make logic chips using 14nm/16nm nodes or thinner, DRAM ICs on nodes of 18nm and below, and 3D NAND chips with 128 layers or more. Licenses for fabs owned by Chinese entities will face a ‘presumption of denial,’ and licenses held by multinational corporations will be decided case by case.

U.S.-based Applied Materials, KLA, and Lam Research this week ceased to supply appropriate tools to their clients in China, including Semiconductor Manufacturing International Corp. (SMIC) and Yangtze Memory (YMTC). Also, the said companies started to withdraw their employees from YMTC’s fabs. The decision has already reduced the value of the global semiconductor sector by hundreds of billions of dollars, and it remains to be seen how significantly it will affect the businesses of Applied, KLA, and Lam Research.

Yet, the move shows how the U.S. can crack down on China’s semiconductor industry in a few days.

The U.S. administration is trying to restrict China's military potential by denying access to government-controlled entities leading processor designs, chip development, and production capabilities, according to Bloomberg. As a result, it wipes billions of dollars from the semiconductor industry's global market value. Some U.S. companies are already restricting access to certain China-based companies to their products and services, whereas others are waiting before the U.S. government makes its restrictions official.

Being the world's second-largest economy and the global factory, China unsurprisingly consumes loads of semiconductors and produces loads of chips in the country. China must adopt the latest technologies designed in the country and elsewhere to support its economic and humanitarian development. Still, those technologies could also help advance Chinese military potential, something that nobody in the region and outside of it likes. Advanced weapons will boost China's influence on the economy and geopolitics, which poses risks not only to U.S. allies like Japan, South Korea, and Taiwan but also to the U.S.

To crack down on advancements in China's military development or at least slow it down tangibly, the U.S. has been gradually imposing restrictions on the Chinese chip industry for several years. Still, the Biden administration is ready to impose even more severe sanctions against China's chip sector in the coming weeks or months. In particular, it looks like the current government wants Chinese contract chipmaker Semiconductor Manufacturing International Co. (SMIC) to stop making chips using its 14nm-class fabrication technology (and thinner) nodes as well as Yangtze Memory Technologies Co. (YMTC) to cease advancing its 3D NAND memory.

The U.S. authorities plan to impose stricter rules on exports of advanced U.S.-originated semiconductor technologies to China. But because the chip industry is global, decisions of the U.S. administration will impact the whole semiconductor supply chain. Capitalizations of large chip companies have been decreasing for a while now as investors have been expecting slowing demand for chips (and it is here). With more restrictions from the U.S., more semiconductor companies will suffer. As a result, the Philadelphia Stock Exchange Semiconductor Index — a modified market capitalization-weighted index composed of semiconductor companies — hit its low this week.

Semiconductor Companies Set to Suffer

Several types of semiconductor industry companies will suffer from the U.S. attempting to crack down Chinese high-tech industry to prevent the development of the country's military potential.

Chip development begins with intellectual property and electronic design automation (EDA) tools. Companies like Ansys, Cadence, Keysight, and Synopsys sell plenty of software and IP blocks to Chinese chip designers. Approximately 13% of Cadence's and Synopsys' 2021 revenue came from China, and that does not count the various chip designs developed elsewhere with China in mind. There are other providers of EDA and similar tools from other countries, and while Cadency and Synopsys are market leaders, usage of software from Siemens EDA (Germany), Zuken (Japan), or Primarius Technologies (China) for chip designs is possible.

We are not sure whether the American government has the power to restrict licensing of Arm chip designs to customers in China. Still, potentially it could confine licensing of certain portions of designs developed in the U.S. Also, the U.S. administration can restrict the usage of American chip development tools to create chips for certain Chinese entities by contract chip designers like Alchip.

Foundries. Hundreds of chip designers in China develop chips requiring sub-14nm/16nm process technologies. At least a dozen companies could use leading-edge production nodes like TSMC's N4/N5 or Samsung's 3GAE/5LPP. If they are prohibited from using advanced manufacturing processes (including relatively mainstream 14nm/16nm-class nodes), contract makers of chips will lose revenue and profits.

Makers of semiconductor production equipment. China is not exactly a leading nation in chip production. Still, with thousands of chip developers in the country (most working on ICs for emerging applications like Internet-of-Things, smart homes, smart cities, etc.), it needs loads of semiconductor production capacity in the country. As a result, China is one of the largest markets for companies like ASML, Applied Materials, KLA, and Lam Research.

Even without the U.S. administration announcing stricter restraints against China's memory and logic production companies, KLA on Tuesday stopped sales of specific tools to Chinese companies that can produce 3D NAND with 128 layers or more, DRAM chips at an 18nm node or thinner, and advanced logic chips, according to Reuters. Despite expectations, KLA stopped shipments to companies like SMIC and YMTC and companies like SK Hynix that produce memory in China.

Chip designers like AMD, Nvidia, and Intel also sell boatloads of advanced chips to various Chinese companies. However, recently the U.S. government barred sales of AMD's, and Nvidia's high-performance compute GPUs to any customers in China, including cloud companies like Alibaba and Baidu, which could have lowered Nvidia's quarterly revenue by up to $400 million if the government did not allow the company to fulfill existing orders and continue to work with Chinese manufacturing partners for a while.

In particular, the U.S. government does not want American companies to sell Chinese entities supercomputing-grade hardware that could allow building machines with the performance of over 100 FP64 PetaFLOPS or over 200 FP32 PetaFLOPS within 41,600 cubic feet (1178 cubic meters), according to China Renaissance.

Some say that the decision by the U.S. administration will speed up the development of high-end compute GPUs by Chinese companies like Biren Technologies; others note that Nvidia is years ahead of any China-based firm regarding software stack for artificial intelligence and high-performance computing. But in any case, China is a large market for high-performance CPUs and GPUs, so the crackdown will inevitably hurt companies like AMD, Nvidia, and Intel.

Will it send Chinese cloud giants back or contain the development of new military capabilities is up for debate. On the one hand, it will hurt companies like Alibaba, Baidu, and Tencent. But on the other hand, they will still be able to buy less capable hardware from AMD and Nvidia, so they will not lose access to American technologies overnight. Still, they will have to spend more on electricity, data center space, and maintenance.

Will It Work?

The U.S. sanctions against China's high-tech sector aim to control what the country gets and restrict some of the technologies to the People's Republic, not wholly destroying its high-technology and economic potential. Therefore, the appropriate U.S. organizations approved 88% of tech exports to China in 2021.

But if the percentage of approvals gets dramatically lower, Chinese semiconductor companies will suffer (and the whole industry with it). China will take years and hundreds of billions of dollars to replace all technologies with U.S. origins.

On the chip production side of matters, the good news for China is that Japan-based chip tools companies like Nikon, Canon, Tokyo Electron, and several others will suffer from the U.S. crackdown and will likely attempt to develop equipment that does not use technology designed in the USA. However, assuming that they succeed and China-based makers will make progress in tools, Chinese SMIC and YMTC will be able to continue advancing their chip technologies (assuming that the U.S. government does not try to curb the production of chips using trailing nodes).

On the chip design side of matters, things are considerably more complex. Local chip developers barely have experience with the design of ultra-large supercomputer-grade chips. While some items may be mitigated by exploiting a modern chiplet-based design approach, there are not enough engineers or senior managers in China to address all large-scale semiconductor projects that the country might need to replace things like Nvidia's A100/H100 compute GPUs, according to China Renaissance. Meanwhile, Taiwan and the U.S. now restrict the hiring of chip specialists by Chinese companies, so getting the right talent will be harder for Chinese companies.

While severe restrictions for the Chinese semiconductor industry might have a drastic effect on local chipmakers, the U.S. government has not entirely restricted access of Chinese companies to American technologies, which has enabled companies like Biren to develop their world-class chips. However, if this happens, the effect will be far-reaching. It will take years for China to replace technologies that originated in the U.S., which will dramatically affect the country's economic development.

But so far, investors' worries about a significant chip demand slump and fears about the future of the global semiconductor industry if the U.S. decides to impose stricter sanctions against the Chinese chip sector have erased more capitalization than any concrete actions by the U.S. administration.

The U.S. Department of Commerce on Friday added 31 companies from China to its Unverified List (UVL), a step that precedes the addition to the Entity List. Among the entities added to the UVL is Yangtze Memory Technologies Co. and various companies involved in Chinese semiconductor and adjacent high-tech industries. Inclusion to the UVL adds roadblocks for companies to acquire technologies from the U.S. 

The U.S. DoC's UVL includes entities whose bona fides (end users) could not be identified "satisfactorily for reasons outside the U.S. Government's control." Inclusion to the UVL means that U.S. suppliers with ties to such companies will have to conduct additional due diligence to verify end users of final products before shipping their tools to entities from the list, reports Reuters. This might potentially mean they will have to apply for additional licenses. Meanwhile, unlike inclusion to the DoC's Entity List, inclusion into the UVL does not mean that U.S. companies will have to get special export licenses for all the goods they ship to the listed companies. 

The inclusion of YMTC into the UVL means that U.S.-based producers of chipmaking tools and software must perform additional checks and notify the U.S. government before shipping their equipment to the 3D NAND memory maker. This does not completely cut off YMTC from new fab tools but makes it harder for the company to procure equipment from companies like Applied Materials, KLA, or Lam Research. Furthermore, some licenses will likely not be granted. 

"The use of license exceptions for exports, reexports, and transfers (in-country) involving a party or parties to the transaction who are listed on the UVL is suspended," a statement of the DoC reads. "Additionally, […] there is a requirement for exporters, re-exporters, and transferors to obtain (and maintain a record of) a UVL statement from a party or parties to the transaction who are listed on the UVL before proceeding with exports, reexports, and transfers (in-country) to such persons, when the exports, reexports and transfers (in-country) are not subject to a license requirement. Finally, […] Electronic Export Information (EEI) must be filed in the Automated Export System (AES) for all exports of tangible items subject to the EAR when a party or parties to the transaction is/are listed on the UVL."

U.S. officials have been talking about restricting YMTC's access to technologies with American origins for weeks now, but the government has not yet blacklisted the company.  

The Biden administration is also considering toughening up access of China-based semiconductor companies to leading-edge equipment used to make chips on 14nm/16nm-class production technologies. This will not disrupt supplies of advanced tools to Samsung and SK Hynix that make 3D NAND and DRAM chips in China, according to a Reuters report, but will substantially affect the competitive positions of companies like Semiconductor Manufacturing International Co. or Yangtze Memory. 

The Semiconductor Industry Association (SIA) has yet to assess how the new export control rules affect U.S.-based chipmaking tools companies. 

"We are assessing the impact of the new export controls on the U.S. semiconductor industry and working with our member companies and the U.S. government to ensure compliance," a statement by the SIA reads. "We understand the goal of ensuring national security and urge the U.S. government to implement the rules in a targeted way — and in collaboration with international partners — to help level the playing field and mitigate unintended harm to U.S. innovation."

Adding another 3D NAND maker to its supply chain is certainly something that is good for Apple, but U.S. legislators are not particularly happy that one of the world's largest consumer electronics companies will use memory from YMTC and thereby essentially help China's semiconductor industry to develop. Apple argues that it plans to use chips from Yangtze Memory only for iPhones to be sold in China. 

Apple has been evaluating the use of 3D NAND from YMTC for months now, and last week a report emerged that the company finally decided to use flash memory from the Chinese manufacturer for its iPhones. The company confirmed to Financial Times that it has been considering using YMTC's products for some of its smartphones sold in China, yet it did not confirm that these chips were used as of last week. There were no plans to use YMTC's devices in smartphones sold outside of China, Apple is reported to have said. But the U.S. lawmakers are still concerned about Apple working with Yangtze Memory. 

YMTC is largely controlled by Tsinghua Unigroup, a company directly to the Chinese government via various banks and investment funds. It also has ties with Tsinghua University, funded by the Ministry of Education. As a result, YMTC is to a large degree  a state-controlled company, which is a concern of U.S. legislators. In fact, they accuse the Chinese government of illegally subsidizing YMTC, giving it a competitive edge over American makers of memory, such as Micron. This of course ignores the $76 billion Chips bill.

Another reason why U.S. lawmakers are worried about YMTC is that it allegedly supplied 3D NAND memory and/or products to Huawei without obtaining an export license from the U.S. Department of Commerce. As of 2020, everyone making products for Huawei using technologies developed in the U.S. (hardware tools used in semiconductor fabs, electronic design automation tools used to develop chips, etc.) must obtain a license from the U.S. Department of Commerce.

"YMTC has extensive ties to the Chinese Communist party and military," said Michael McCaul, a congressman for Texas who sits in the House foreign affairs committee, in an interview with Financial Times. "There is credible evidence that YMTC is breaking export control laws by selling goods to Huawei. Apple will effectively be transferring knowledge and know-how to YMTC that will supercharge its capabilities and help the CCP achieve its national goals." 

Some lawmakers want commerce secretary Gina Raimondo to put YMTC on the entity list for its ties with CCP, and therefore ban it from getting U.S. tools and software, according to the Financial Times's sources.

While YMTC is a very competitive company that indeed has close ties with the Chinese government, it is only one of Apple's suppliers from China. There are tens of companies from China that supply parts for Apple's iPhones and other products. Actually, even some OLED screens for Apple's smartphones are supplied by Beijing-based BOE Technology Group. That said, even without YMTC, Apple's products are full of technology developed and made in China. That might change eventually as Apple shifts some of its production to India and other countries, but that will of course be a slow process. 

At least three SSD makers — Corsair, Gigabyte, and Goodram — announced their SSDs based on Phison's E26 controller with a PCIe 5.0 x4 interface over the past few weeks. Corsair's and Goodram's drives offer a maximum sequential read speed of 10 GBps, whereas Gigabyte's product is said to hit 12.4 GBps. There is a reason for that: No 3D NAND chips are currently fast enough to saturate the controller's capabilities.

Phison's PS5026-E26 controller has eight NAND channels, which is typical for client SSDs. These channels support different data transfer rates, but to saturate a PCIe 5.0 x4 (15.754 GBps in both directions), it needs 3D NAND memory with a 2400 MTps interface. Micron was first to announce such memory this July, SK Hynix followed in early August, then YMTC introduced its Xtacking 3.0 architecture enabling a 2400 MTps speed. All of Phison's E26 demonstrations were with SSDs featuring Micron's latest 3D NAND chips, and this is when those drives hit ~12 GBps sequential read speeds. Galax is also testing its HOF Extreme 50 SSDs with Micron's 232-layer 2400 MTps chips, according to ITHome.

Micron's 232-layer 3D NAND chips with a 2400 MTps interface are ahead of the rivals in mass production and maturity. But there is a problem. Yields of chips with 2400 MTps data transfer rates are low; they work perfectly at 1600 MTps, though. As a result, it will take the company some time to initiate mass production of chips that all work at 2400 MTps, which will presumably happen sometime early next year, according to Tom's Hardware sources.

In the meantime, SSDs based on Phison's E26 controller will only hit around 10,000 MBps. Gigabyte announced its Aorus Gen5 10000 SSD with a 12.4 GB/s sequential read speed with Micron's 2400 MTps memory, whereas Corsair and Goodram rated their drives at 10 GBps since they will have to use 3D NAND memory with a 1600 MTps interface.

Will Gigabyte be able to procure enough 2400 MTps chips for proper availability of its drive is something only time will tell. Corsair and Goodram are arguably more realistic with their performance targets, so expect their SSDs to be available widely, and these will be among the best SSDs this fall. Also, expect these companies to launch successors to their MP700 and IRDM Pro drives as soon as memory with a 2400 MTps interface is available widely. Finally, we have no idea when Galax plans to introduce its HOF Extreme 50 drive, but since it is testing it with Micron's 232-layer 2400 MTps chips, you can make some guesses.

Apple has reportedly approved 3D NAND flash produced by Yangtze Memory Technologies Corp. and will now use it for its upcoming iPhone 14 smartphones. The move represents a strong win for YMTC and will ensure steady supply of flash memory for Apple's next-generation products. 

For now, Yangtze Memory will supply Apple 3D NAND for its upcoming iPhone 14 handsets, reports BusinessKorea. Smartphones are Apple's most popular products, so Apple needs boatload of DRAM and NAND for its smartphones. But eventually Apple could adopt YMTC's memory for other products as well. For example, YMTC has extremely competitive products incoming, such as its latest family of six-plane 3D NAND chips featuring the company's Xtacking 3.0 architecture and a 2400 MT/s interface speed. These chips could eventually enable some of the best SSDs. 

It is going to take a while for YMTC's latest products to mature and get into Apple's other products. But considering specifications offered by the company's latest 3D NAND devices as well as Apple's expertise in 3D NAND and controllers, YMTC's have all chances to land into iPads or Macs at some point. 

Being one of the world's largest consumers of 3D NAND flash, Apple tends to procure memory from different vendors, including Kioxia, Samsung, and SK Hynix. Adding YMTC to the supply chain means that Apple will now have more choice from characteristics and performance points of view as well as better positions to negotiate prices as many products supplied by the four manufacturers are more or less identical. 

From YMTC standpoint, winning a supply contract with Apple is a big deal as so far the company has primarily shipped its 3D NAND as well as solid-state drives to Chinese vendors. 

While the U.S. semiconductor developers and production tools producers welcomed the U.S. CHIPS Act and Science law that will provide subsidies to American chip developers and manufacturers, two Chinese trade associations believe that the legislation hinders innovation, discriminates against foreign companies, and intensifies geopolitical tensions.

"The act will intensify the global geopolitical competition in the semiconductor sector and hinder global economic recovery and future technology innovations," a joint statement by the China Council for the Promotion of International Trade (CCPIT) and China Chamber of International Commerce (CCOIC) published by the state-backed Global Times reads.

The recently signed CHIPS Act and Science law authorizes the U.S. government to award local chipmakers about $52 billion in grants and other incentives as well as provide a 25% investment tax credit for new fabs worth up to $24 billion. Meanwhile, companies who receive funds under the CHIPS Act and Science legislation will be prohibited from building new or expanding existing fabs in China and other countries that present a threat to the U.S. national security over the following 10 years. In addition, the new law will grant tens of billions of dollars to various high-tech research and development projects in the U.S.

"On the one hand, it is a typical industry-specific subsidy, which does not conform to the non-discrimination principle of the World Trade Organization," the statement partly published by ChinaDaily reads. "On the other hand, the bill identifies particular countries as key targets, which leads companies to be forced to adjust their global development strategies and layouts."

It is noteworthy that China's local authorities co-own fabs operated by Semiconductor Manufacturing International Corp. (SMIC), the country's largest contract maker of chips. Meanwhile, state government backs Tsinghua Unigroup, which happens to own YMTC, the only national 3D NAND producer, as well as controls tens of chip designers.

"The US is using government power to forcibly change the international division of labor in the semiconductor field and harm the interests of companies from all over the world, including Chinese and American companies," a quote published by Anadolu Agency reads.

Nowadays the U.S. only produces 12% of the global chip output and is significantly behind Taiwan, South Korea, and China. Subsidies for chipmakers in the U.S. will make it more appealing for them to build fabs in America rather than in Asian countries. But another important part of the legislation promotes research and development in the U.S. About half of the world's chips are designed in the U.S., with additional subsidies from the federal government that share could grow, something that Chinese trade groups seem to also oppose.

In addition to subsidizing semiconductor research, development, and production in the U.S., the U.S. government has been restricting sales of American chip production equipment to Chinese manufacturers (e.g., SMIC) to prevent the country from using American technologies and equipment in military purposes. Meanwhile, CCPIT and CCOIC are confident that U.S. restrictions will not slow down Chinese semiconductor industry development.

China-based Yangtze Memory Technologies (YMTC) has announced the latest iteration of its Xtacking NAND technology (now in its third generation), ushering in a new era of speed, density, and improved power efficiency. According to the company, its latest NAND chips (X3-9070) improve performance by 50% over previous designs (based on its 128-layer Xtacking 2.0 tech), while doubling density to 1TB per chip. Paired with a 25% reduction in power consumption despite the improved speed, it seems that Apple might find even more reasons to adopt the company's tech.

"The advent of YMTC's self-developed Silicon Stack 3.0 architecture is an important breakthrough in the 3D NAND track," said Gregory Wong, founder and chief analyst of Forward Insights. "It has been proven that the hybrid bonding of storage arrays and peripheral logic circuits is essential to drive the development and innovation of 3D NAND technology."

YMTC's Xtacking 3.0 tech brings about a claimed 50% performance improvement over the previous generation, achieving 2,400 MT/s over the previous gen's maximum of 1,600 MT/s. The company pins both the performance and power efficiency improvements on its adoption of a 6-plane NAND design, instead of the more traditional 4-plane of the previous generation. The doubling in density is nothing to scoff at either, and is a required development in a world with ever-increasing data storage needs. 

Interestingly, YMTC doesn't yet seem to have deployed its 196-layer NAND design with the announcement of the X3-9070 NAND chips. The company's next-generation NAND tech was slated to enter production sometime in the second half of this year, but any references to it in volume production are still absent. It may be that the company encountered difficulties in the transition, or perhaps it's just a case of it adopting a tick-tock like manufacturing and research process — first figuring out the new 6-plane design, improving yields, with a later introduction of their new layer density.

Despite its technological advancements, YMTC is still trailing Micron and other NAND manufacturers around the world. Micron has announced volume production of its 232-layer NAND tech for later this year, with some impressive density and performance characteristics, while SK Hynix is hot off our own presses with its 238-layer designs. YMTC's battle continues to be an uphill one, but it's impressive what the company has achieved while fielding only two 300mm wafer fabs for its actual production runs. The company will have to scale further in order to capture any sizable market share, but it seems its R&D investments have been paying off - despite continuing US pressure — the latest of which specifically addresses NAND technologies.

China specifically possesses one of the biggest addressable markets across the globe, and companies worldwide look at it — and the potential earnings — with a certain twinkle in their eyes. The increasing pressure on China's technology imports imposed by the United States has led the country's leadership — and its companies — to focus on developing domestic technology that is able to not only serve its market, but the various billion-dollar tech markets. NAND is but a slice of it — but a significant one, valued at $66.52 billion in 2021 (expected to reach $94.24 billion in value by 2027).

In recent years the U.S. government has taken steps to crackdown on Chinese production of logic chips using advanced fabrication processes. In a bid to prevent the country from advancing its military capabilities. In addition to logic chips, U.S. officials are now mulling a crackdown on China's 3D NAND production industry. The biggest issue is that in addition to domestic makers, such restrictions will affect Samsung and SK Hynix. 

The U.S. government is considering banning shipments of American 3D NAND production equipment to manufacturers of flash memory with more than 128 layers in China, which will affect Yangtze Memory Technologies Co. (YMTC), China's only domestic 3D NAND maker, reports Reuters citing sources familiar with the matter. But in addition, such a move will also hurt Samsung and SK Hynix, which produce 3D NAND memory in China too. 

At present China's YMTC commands about 5% of global 3D NAND production, whereas Samsung, SK Hynix, and YMTC produce about 23% of the global 3D NAND output in China, according to Yole Intelligence cited by Reuters. 

Previously the U.S. government restricted shipments of advanced chip production tools to China citing national security concerns. By contrast, 3D NAND hardly poses any threat to national security. Meanwhile, 3D NAND made in China competes against 3D NAND produced by American companies — Micron Technology and Western Digital. Protecting them from cheap flash memory produced in China will improve their market positions, but will naturally upset South Korea-based Samsung and SK Hynix. 

If the action is approved, this will not only disrupt production of 3D NAND in China and leave the market without crucially important commodity memory, but will also hurt U.S.-based companies like Applied Materials, KLA, and Lam Research, which sell large amounts of equipment to China.  

While American companies produce crucially important fab tools, there are companies from Japan, South Korea, and even Taiwan that may substitute some of the equipment made in the U.S. As a result, it is unclear whether the U.S. ban will have a desired effect on Chinese 3D NAND production industry in the long term. 

Earlier this week the U.S. government imposed new export rules under which American companies will have to apply for an export license if they sell semiconductor production tools capable of producing chips using 14nm-class and thinner nodes.

Market analysis firm TrendForce has revised its NAND pricing expectations for 3Q2022 - and it might be a boon to consumers. As the NAND oversupply seemingly hits harder than previously projected, pricing for client NAND-based products looks poised to drop by 8-13%, compared to the 3-8% that was previously expected. The balance between supply and demand is thus deteriorating faster than expected. According to TrendForce, am inordinately slow 2H22 peak season for consumer electronics including notebooks, TVs, and smartphones is to blame.

TrendForce aligns the steeper price drop with a more disappointing 2Q, which saw continued lagging demand alongside the rolling innovation in NAND Flash output and process design. Uptake in manufacturing of 176-layer, client-focussed QLC SSDs and YMTC's planned market volume expansion have also increased price competition between manufacturers, forcing them to increase price concessions to incentivize clients towards increasing order volumes.

One has to remember that the broader economic downturn, decades-high inflation, and continued hikes in interest rates have likely driven consumers away from "expendable" necessities such as smartphone and TV upgrades and has impacted the general PC market as well, which is expected to shrink by 8.2% during the course of 2022.

As for notebooks, the most enthusiastic technology users would have already upgraded in the wake of the COVID-19 lockdowns. While those memories may now be slipping away in our collective minds, notebooks and consumer electronics purchased during the start and peak pandemic days are still likely going strong in delivering the required computing experiences, pushing away the need for further investments.

NAND-based products material inventory levels continue to rise due to the lower demand, and have now become elements of risk for the supply chain (let's not forget that filled warehouses also incur in losses). Due to slow destocking among distributors and a conservative stocking approach among clients, inventory problems have bubbled over upstream onto the manufacturing space as well. 

As a result, system integrators have had to reduce their 3Q orders so as to digest rising inventory levels from unsold materials harking back to 1Q purchases.

Enterprise-focussed SSDs too are seeing declines, as the overall economic recession has slowed down whole-device acquisitions in all but the most powerful High Performance Computing (HPC) environments. Despite macroeconomic indicators, no-one wants to be left behind in the supercomputing race towards the Exaflop Frontier, which has seen significantly increased investments across the world, with Europe, the US and China leading the pack through their own distinct approaches.

This leads TrendForce to believe Enterprise SSD market pricing will decline 5~10% in the 3Q.

eMMC products, which typically dominate IoT and budget consumer electronics devices, will be following the client-level oversupply trend, which might ultimately lead to a comparable 8~13% price reduction. The same is true for UFS-based products, such as smartphones, memory cards and USB drives. 

Despite the shrinking uptake on the NAND-powered product space, it seems like storage n general is experiencing a particular crunch, as the HDD sector too saw drops in demand that reached the 33% mark year-over-year. 

Consumers that can either hold their purchase options or extend their budgets in order to acquire some of the best SSDs - whether for their personal computers, as external storage devices, or extenders for the latest-generation consoles - might do well in timing their purchase for 3Q.

When you think of countries that produce SSD controllers, Russia probably doesn't come to mind. However, this week at the Innoprom 2022 show, Russian vendor Kraftway demonstrated the company's latest ASIC v1 and ASIC v2 SSD. The PCIe 4.0 drives are the first of their kind to leverage a Russian SSD controller and may have what it takes to challenge the best SSDs on the market.

Both SSDs utilize the K1942VK018 SSD controller, Russia's first domestic SSD controller. According to Kraftway, the K1942VK018 is a product of TSMC's 28nm HPC+ manufacturing process and has eight memory channels. In addition, there is support for ONFI 4.0, soft LDPC decode, RAID, monitoring, and power management. The K1942VK018 reportedly has a power consumption of between two to four watts and will power a diversity of SSDs, including half-height/half-length (HHHL) add-in card, M.2, and Enterprise and Data Center SSD Form Factor (EDSFF) form factors.

The Kraftway ASIC v2 comes in an HHHL presentation and can house 3D MLC, TLC, and QLC NAND. The company has validated chips from Kioxia (formerly Toshiba Memory), Micron and YMTC (Yangtze Memory Technologies Co.). In addition, the ASIC v2 specifically utilizes Russian GS Nanotech memory made from Micron and Kioxia NAND. The SSD adheres to a PCIe 4.0 x4 interface with capacities reaching up to 16TB. The sequential read and write performance exceeds 1,500 MBps, and random read and write speeds over 200,000 IOPS and 150,000 IOPS, respectively. In its demo, the ASIC V2 posted sequential read and write numbers up to 971.32 MBps and 476.65 MBps.

The Kraftway ASIC v1, on the other hand, focuses on data security features and accommodates 2D and 3D MLC or pMLC NAND. The M.2 drive is limited to a PCIe 2.0 x4 connection, and the maximum capacity is 2TB. The vendor rates the ASIC v1 with sequential read and write speeds of 830 MBps and 680 MBps, respectively. Random performance scales up to 55,000 IOPS writes, and 65,000 IOPS reads.

Kraftway didn't reveal the pricing for the pair of new SSDs. However, the manufacturer did confirm that the drives are already shipping in Elbrus-powered systems. Kraftway aims to commence mass production of its SSD controllers in 2023. According to a recent report from Habr, a representative from Kraftway told the publication that the Russian manufacturer has inked a deal with Chinese chipmaker YMTC for joint production. Kraftway partnered with TSMC before the financial sanctions imposed on Russia due to the latter's invasion of Ukraine.

In comparison to Kioxia and Micron, YMTC's production capability is significantly lower. The chipmaker's original plant outputs 100,000 wafers per month. Nonetheless, YMTC has already started preparing a second facility that would deliver up to 200,000 300mm wafers per month, bringing the foundry's monthly production up to 300,000. It'll be interesting to see how things pan out for Kraftway since one of YMTC's priorities is supplying domestic vendors in China's push for semiconductor self-sufficiency. But then, there's also a report that tech giant Apple is contemplating bringing on YMTC as a NAND supplier.

The U.S. government officials are working with their counterparts from the Netherlands to ban sales of virtually all lithography tools produced in the country to companies in China. If the American politicians succeed, this will significantly blow Chinese efforts to become a world-class semiconductor producer and will thwart the country's Made in China 2025 plan. 

ASML is the world's largest maker of lithography tools used to make all kinds of chips. However, the company cannot sell its extreme ultraviolet (EUV) lithography equipment to its Chinese clients. Still, U.S. politicians propose restrictions under which ASML will not be able to sell its mainstream deep ultraviolet (DUV) lithography tools to Chinese customers as well, reports Bloomberg. DUV is used to make the vast majority of widely used chips that power client PCs, servers, mobile electronics, autonomous vehicles, and robots.  

Persuading the Dutch government to ban sales of virtually all lithography scanners to Chinese customers will not be easy. Chinese fabs run by local companies like Hua Hong,  Semiconductor Manufacturing International Co. (SMIC), and YMTC, or global players like TSMC, Samsung, and SK Hynix accounted for about 16% of ASML's revenue in 2021 (which reached $18.6 billion), and that is a lot of money. 

ASML argues that it is not the world's only maker of DUV scanners (albeit the largest one), and similar machinery is available from Canon and Nikon. Yet, if the U.S. manages to leave China without ASML's tools, other companies will not be able to replace them soon. Furthermore, American politicians argue that advancements in modern chip packaging technologies allow Chinese companies to design and produce pretty sophisticated chips that can advance Chinese supercomputing and, ultimately, military technologies. 

The U.S. has banned several Chinese companies from accessing technologies developed by USA-based companies, nearly driving Huawei's chip arm HiSilicon out of business. In addition, prohibiting sales of ASML's lithography tools to China will devastate the local semiconductor industry.  

Meanwhile, banning ASML's scanners to Chinese companies is not the only way the U.S. can thwart the local chip industry. Semiconductor fabs use hundreds of tools produced by numerous American companies, such as Applied Materials, KLA, and Lam Research. Forbidding them to work with China will have a devastating effect on Tianxia's semiconductor efforts. Moreover, some of their tools cannot be sold to China due to national security concerns. 

But leaving companies from China without semiconductor fabrication tools will impact the rest of the world. For example, a substantial part of DRAM and 3D NAND memory production is in China. Leaving companies like Samsung, SK Hynix, and YMTC without their Chinese fabs will affect the global chip and electronics supply chain. Furthermore, TSMC, SMIC, and Hua Hong produce loads of chips for their international clients; if they wind down production, this will also affect American chip designers.

CORRECTION (5/17/2022): YMTC says that the PE310 and PE320 are not controllers but the model numbers of SSDs it produces. The company is not disclosing what controllers these drives use and who makes them so we have no way of knowing whether the company is in-fact developing its controllers or not. The original article text is below.

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All leading makers of 3D NAND memory have their in-house developed controllers for solid-state drives that power their own-brand SSDs. Being a considerably smaller 3D NAND manufacturer, Yangtze Memory Technologies Co. is following in the steps of its larger rivals by designing its own SSD controllers. Recently two of these controllers passed PCI Express compliance validation at a PCI-SIG workshop.

YMTC's family of PCI-SIG-validated SSD controllers currently include models PE310 and PE320, though there may be other controllers that are not listed in the PCI-SIG Integrators List. Both controllers feature a PCIe 4.0 x4 host interface and are designed for higher-end drives. Since both chips have the same host interface, we can speculate that they support a differing number of NAND flash channels. 

Speaking of NAND channels, it is necessary to note that one advantage that YMTC's 3D NAND chips have over rivals is their ultra-fast interface. This benefit is enabled by the company's Xtacking technology, which entails manufacturing a 3D NAND memory array and a NAND logic (address decoding, page buffers, etc.) on two different wafers and then bonding them together. YMTC once said that its Xtacking could enable I/O speeds of 3 GT/s (up from 1.6 ~ 2.0 GT/s data transfer rate on today's 3D NAND chips from companies like Samsung or SK Hynix), so building a controller that supports this transfer rate could incredibly fast SSDs (that may even end up in our list of the best SSDs available today).

Historically, among makers of 2D and then 3D NAND, only Samsung and Intel designed SSD controllers in-house, whereas other leading manufacturers of flash memory left the development of SSD controllers to third parties. In many cases, lousy combinations of NAND, controller, and firmware led to inferior drives.  

But as the SSD market grew from tens of millions of units in the late 2000s to hundreds of millions of units in 2015 and 3D NAND and SSD architectures got more complex, all makers of NAND memory (except Toshiba, which owned a stake in Phison) initiated the development of SSD controllers in-house. These are two key reasons why makers of memory started to develop their own SSD controllers:

• New generations of 3D NAND memory require very advanced error correction and signal processing algorithms. For obvious reasons, developers of 3D NAND devices can bring together a particular set of algorithms to a particular 3D NAND IC better than a third party. Also, new generations of SSDs require more sophisticated bad block management, end-to-end data path protection, advanced security functions and many other technologies that have to be prudently implemented, keeping capabilities of particular 3D NAND ICs in mind.
• Meticulous integration of 3D NAND memory, controller, and firmware allows making fast and reliable drives, something that consumers and OEMs demand. Selling tens of millions of SSD is far more profitable than selling millions of 3D NAND wafers or tons 3D NAND chips.

YMTC clearly has similar motives as other suppliers of 3D NAND memory, so the development of own-brand controllers (or even ordering custom controllers from a third party and then enabling exclusive features) is an entirely logical and expected move from a Chinese 3D NAND producer. 

YMTC previously collaborated with Phison and Silicon Motion to enable turnkey SSD solutions and its own-brand drives. We fully expect the company to continue working with both controller developers in the future. In fact, Samsung is the only maker of 3D NAND that does not sell its SSD-graded memory on the open market. Other manufacturers supply their chips to various SSD makers, which is why they also have to work with SMI and Phison to ensure compatibility with controllers.

Apple is reportedly considering adding China-based Yangtze Memory Technologies Co. (YMTC) to its list of 3D NAND memory producers to diversify its supply chain and protect against sudden interruptions. YMTC would hardly become a major Apple supplier, but adoption of its memory by one of the world's largest makers of electronics will be a huge step forward for the Chinese semiconductor industry.

Apple Needs More 3D NAND

Apple has been negotiating with YMTC it for months, but the agreement has not been reached yet, according to a Bloomberg report that cites sources with knowledge of the matter. After Kioxia and Western Digital lost 6.5 exabytes of 3D NAND flash due to contamination issues at one of their fabs in Japan and increased risk of supply disruptions, Apple got more inclined to add another 3D NAND supplier to its list. Apple is now reportedly evaluating 3D NAND samples from YMTC.

Apple uses 3D NAND flash for all of its devices. Since the company designs controllers and firmware for solid-state storage in house, it can tailor them for memory from different manufacturers.

Yangtze Memory is the only China-based developer of 3D NAND memory that produces chips in volume. The company is considerably smaller than Apple's suppliers Kioxia, Micron, Samsung, and others, so it will hardly challenge these manufacturers. In fact, given how much 3D NAND flash Apple uses for its devices (and the fact that sales of the company's PCs, smartphones, and tablets are growing, just as content of NAND flash inside them), it remains to be seen whether and how quickly YMTC will be able to meet Apple's demands in terms of volume. 

More Suppliers from China

Virtually all of Apple's PCs, smartphones, tablets, and other products are made in China by contract manufacturers like Foxconn Electronics or Pegatron. Yet, the majority of components Apple's products use come from outside of China. But Tianxia is slowly gaining share inside devices designed by the California-based company. 

Apple already uses displays from BOE Technology Group (former Beijing Oriental Electronics), a major Chinese maker of display panels. Furthermore, the company most probably uses certain chips produced by Semiconductor Manufacturing International Corp. (SMIC) for its clients, who are Apple suppliers. Therefore, adoption of YMTC's 3D NAND will be another milestone in Apple's adding of Chinese manufacturers to its roster of suppliers.

Can YMTC Supply Enough 3D NAND for Apple?

Apple is reportedly a very demanding customer, placing large orders and reportedly expecting priority. YMTC's actual abilities to supply to Apple and its existing customers is something that remains to be seen.

YMTC is a crown jewel in a holding controlled by troubled Tsinghua Unigroup, which is backed by the state, which is undergoing restructuring. Back in 2019, YMTC had plans to expand its 3D NAND production capacity to around 150,000 3D NAND wafer starts per months (WSPMs), but financial difficulties of its parent most probably affected these intentions. As of early 2021,  the company's production capacity was about 100,000 64-layer 3D NAND WSPM, according to Nikkei.

By now, Yangtze Memory has started production of 128-layer 3D NAND memory, which uses more process steps, wafers spend more time in chemical vapor deposition (CVD) machines, so the number of WSPMs gets lower but the number of NAND memory bits gets higher. It should also be kept in mind that unlike other makers of 3D NAND, YMTC produces NAND memory array and a NAND logic (address decoding, page buffers, etc.) on two different wafers (and at two different fabs) and then connects the memory arrays to the logic by metal via its proprietary Xtacking technology. 

So while YMTC has two 300-mm semiconductor production facilities that can house plenty of tools, its actual production capacity is unknown. Furthermore, it is unknown whether the company can rapidly expand its manufacturing capabilities if it needs to.

Yangtze Memory Technologies (YMTC) is reportedly now shipping 128-layer, QLC-based consumer-grade NAND manufactured with the company's in-house 3D Xtacking technology. The move is seen as an important one for China to reduce its dependence on high-tech and semiconductor imports, and the company is beginning market penetration via consumer-geared solutions that will be employed in Chinese smartphones and notebooks. 

The aim is to take advantage of the explosive growth in capacity requirements for storage applications, as well as for emerging and ballooning technologies such as 5G. 

Tech Insights did a teardown of Asgard's latest PCIe 4.0, AN4 1TB SSD solution, which is the first commercial application of the 128-layer manufacturing technology. According to YMTC COO Cheng Weihua, this is a result of volume production being achieved on the 128-layer design. For now, the company's Xtacking 2.0 tech is being used in the manufacturing of 128-layer 512Gb TLC dies (TLC being the preferred cell information density from YMTC until now), as well as the 128-layer QLC 3D NAND itself. The company plans to transition to its Xstacking 3.0 design sometime in the latter half of 2022, with production capacity reaching its peak output by then.

YMTC's Xstacking 2.0 is a 3D manufacturing technology that shies away from actual 3D manufacturing. Instead, the NAND flash's expansion in the Z axis is done via bonding two separately-manufactured wafers: One of these deals with the actual NAND array itself, while the other holds the CMOS circuitry (such as page buffers, column decoders, charge pumps, global datapath and voltage generators/selectors). 

The Xstacking technology behind the manufacturing process has been well-received by the industry. The company achieved a 92% higher bit density (8.48 Gb/mm2, 512 Gb) compared to dies manufactured with xStacking 1.0 (4.42 Gb/mm2, 256 Gb), showing that YMTC has a robust future plan for the technology's roadmap. Perhaps more surprising is that YMTC has achieved higher levels of density (8.48) with its TLC Xtacking 2.0 NAND than Samsung (6.91), Micron (7.76) and Sk hynix (8.13). A welcome reversal of expectations for Chinese tech, then; however, YMTC did bring its 128-layer process later to market than the aforementioned manufacturers - there was more knowledge and design time accumulated for their solution than for any of the others.

The launch comes on the heels of a reported delay on volume manufacturing capabilities for the 128-layer QLC NAND, with the company citing unsatisfactory yields as the deciding factor in pushing volume production forward. It's currently unclear if the company has already surpassed those difficulties and is now on schedule with its 100,000 WPM (wafer starts per month); however, the presence of the company's latest NAND in consumer-geared solutions only, sacrificing the high-revenue of professional and server-bound applications, does point towards a conservative estimate on the company's advances when it comes to yields.

Asgard, a Chinese memory and storage manufacturer, has announced the company's first PCIe 4.0 SSD. With its blazing speed, the AN4 could easily rival some of the best SSDs that are currently on the market.

The AN4 is based on Innogrit's IG5236 Rainier controller and YMTC's 128-layer 3D TLC (triple-level cell) NAND chips. YMTC (Yangtze Memory Technologies Co., Ltd) produces the 128-layer TLC NAND with the company's proprietary Xtacking 2.0 technology. The process consists of producing the interconnects and NAND stacks on separate wafers. YMTC then fuses the wafers together by aligning the millions of little holes with an optical system.

To remain cool during operation, the AN4 features a robust heatsink with a dissipation area up to 8cm². Asgard claims that the heatsink helps reduce operating temperatures by up to 30 degrees Celsius. The vendor rates the AN4 with sequential read and write speeds up to 7,500 MBps and 5,500 MBps, respectively. The drive's random performance remains a mystery.

Asgard touts the AN4 with a high endurance rating, but the exact TBW (terabytes written) values are a mystery. The SSD comes with a limited five-year warranty. Asgard didn't share the pricing either, but confirmed that the 1TB model will hit the shelves in early August, while the 2TB  and 512GB models are in the planning stage.

Asgard AN4 PCIe 4.0 Performance

One user from the Bilibili forums have already put the Asgard AN4 1TB SSD through its paces. The AN4 adheres to a double-side PCB design with four NAND chips that carry the YMN09TC1B1HC6C part number. 

The reviewer noted that the AN4 supports a maximum payload size (MPS) up to 512 bytes, which theoretically allows a transfer rate up to 7,500 MBps. Other SSDs with support for a 256-byte MPS top out at 7,150 MBps. The right motherboard is required to hit these values, though. He highlighted that only AMD motherboard support MPS up to 512 bytes, while Intel Z590 motherboards are limited to 256 bytes.

The Bilibili user compared the AN4 to other similar drives with the same Innogrit IG5236 Rainier controller with different TLC NAND chips. He pitched YMTC's 128-layer NAND against Micron's 176-layer B47R NAND and Kioxia's 96-layer BICS4 NAND.

The AN4 got very close to Asgard's advertised specifications on CrystalDiskMark. However, the real star of the show is YMTC's 128-layer 3D TLC NAND.

In terms of sequential read speeds, YMTC's NAND was only a tad faster than Micron's NAND, but offered up to 7% better performance than Kioxia's NAND.

When it comes to sequential write performance, Micron outperformed YMTC by 2%, but YMTC beat Kioxia with a 9% margin.

The YMTC 128-layer NAND came in first place in 10 out of the 16 different tests. It performed consistently well in PCMark 10's Drive Performance Consistency Test, which is a torture test that runs between 10 to 20 hours and puts more than 23TB of drives on the SSD. In other workloads, such as game loading or Chia plotting, YMTC was only marginally faster than Micron and Kioxia.

The general conclusion is that YMTC has caught up to veteran players, such as Micron and Kioxia, in regard to performance. However, there are still two unknowns with YMTC's 128-layer NAND. Performance is great, but endurance and pricing is just as important. For the meantime, we don't know just how durable YMTC's NAND is or whether if it's cheaper or more expensive than its rivals.

Self-sufficiency doesn't just happen overnight, but Yangtze Memory Technologies Co., Ltd. (YMTC) is pushing China in the right direction. The Wuhan-based chipmaker (via PC Watch) has launched the PC005 and SC001 Active lineup of SSDs under the new ZhiTai sub-brand.

The SSDs leverage the company's own 64-layer 3D NAND chips that are manufactured with the company's proprietary Xtacking 3D NAND technology. 

But this is only a stepping stone in YMTC's efforts to make the best SSDs. YMTC already took the wraps off its 128-layer QLC (quad-level cell) 3D NAND offerings that max out at 1.6 Gbps in April. It's just a matter of time before the new NAND chips make their way into faster retail products.

A bit of mystery still surrounds the SSDs, such as the manufacturer and model of the controller that resides in their interior. Given YMTC's recent alliance with Phison, it's natural to assume that the drives are using a Phison controller. But then again, YMTC also has an ongoing partnership with Silicon Motion. According to PC Watch, the unidentified controller is tailored to YMTC's NAND chips to maximize their performance and longevity, suggesting a custom controller.

YMTC PC005 & SC001 Active SSD Specifications

YMTC offers the PC005 and SC001 Active SSDs in capacities of 256GB, 512GB and 1TB. The chipmaker backs the PC005 Active with a limited five-year warranty and the SC001 Active with a shorter, three-year warranty.

The PC005 Active is a standard M.2 2280 drive that dwells on a PCIe 3.0 x4 interface. The sequential read and write speeds go up to 3,500 MBps and 2,900 MBps, respectively. The PC005 Active offers random performance figures up to 340,000 IOPS reads and 360,000 IOPS writes. Endurance varies between 200 TBW and 640 TBW.

The SC001 Active, on the other hand, is available in both M.2 2280 and 2.5-inch formats. In either case, the drive will be limited to SATA III interface speeds. In terms of performance, YMTC states sequential read and write speeds up to 520 MBps and 512 MBps, respectively, and random read and write speeds up to 80,000 and 70,000 IOPS, respectively, across all capacities. The endurance ratings span from 170 TBW to 680 TBW.

YMTC vs. Samsung SSDs

Specifications don't always tell the whole story. It remains to be seen whether YMTC's SSDs can really walk the walk. And we won't know for sure until we test it ourselves. 

If we only look at the numbers, the drives seem to possess similar performance to other name-brand drives, such as Samsung. For example, the PC005 Active 1TB model's sequential numbers surpass those of the the Samsung 970 Evo 1TB. On the flip side, the Samsung drive crushes the PC005 in random performance. However, the PC005 Active 1TB's endurance is rated for 640 TBW, 40 TBW higher than the Samsung 970 Evo 1TB.

The SC001 Active 1TB's sequential performance is right up the Samsung 860 Evo 1TB's alley. Once again, this Samsung SSD comes out on top in random performance. The endurance margin seems to be even bigger though. YMTC rates the SC001 Active 1TB for 680 TBW, while the Samsung 860 Evo 1TB is good for 600 TBW.

The PC005 Active 256GB and 512GB models currently sell for around $54 and $77, respectively on Chinese online retailer JD.com (1TB pricing isn't known yet). In its 2.5-inch form, the SC001 Active 256GB, 512GB and 1TB go for $42, $67 and $123, respectively.

Over the last few years, all of the major NAND makers have been in a race to build NAND memory with incredibly high layer counts, and now, these efforts are paying off for SK hynix. Today, the South Korean memory manufacturer is unleashing its Gold P31 SSDs onto the open consumer market, making SK hynix the first to sell an SSD with 128-layer NAND.

The Gold P31 SSDs come in the form of M.2 NVMe drives operating over the PCIe 3.0 interface, packing capacities of either 500 GB or 1 TB. 

Both of the drives feature read speeds of up to 3500 MB/s and writes of up to 3200 MB/s, which is in-line with the best PCIe 3.0 based NVMe drives, saturating the PCI-Express bandwidth. 

SK hynix says that the quality of the drives should be equal to that of the Samsung 970 Evo, albeit with better value.

Stacking the memory dies many layers on top of each other like this enables the NAND makers to cram more data into the same dies, which in the end uses less silicon per GB and reduces production costs, which are benefits that translate on to consumers. Tally that with today's low NAND prices, and SK hynix has some seriously sharp pricing on these units. Meanwhile, Samsung is working on 160-layer NAND, Intel on 144 layers, and YMTC on 128-layer 3D NAND, but none of them have brought a product to market yet.

The 1 TB SK hynix Gold P31 costs $135 on Amazon, with the 500 GB variant costing $75. 

YMTC, a relative newcomer to the NAND market, may be starting its own SSD brand in Q3, according to a report from DigiTimes today. The Chinese-based company recently started mass production of its own design 64-layer 3D NAND, which it will purportedly use in its SSDs.

DigiTimes' report cites unnamed industry sources claiming that YMTC will initially focus on building PCIe 3.0-based SSDs but might work on PCIe 4.0 drives in the future -- a path that likely depends on the success of the former.

From the looks of it, YMTC doesn't have its own controller technology yet, though. Consequently, it may use a Phison or Silicon Motion controller to handle data throughput between the NAND and your PC. A controller partnership with Phison wouldn't be surprising, considering that Phison has already partnered up with Yangtze Memory Technologies in a move that opened the door for SSDs with NAND made from Chinese companies. 

Meanwhile, YMTC is also set to initiate mass production of its 128-layer tall 3D NAND later this year too. YMTC will build this technology with Xtacking 2.0, which is YMTC's version of Samsung's Double-Stack tech that the Korean manufacturer is using to stack up to 160 layers tall.

It's not clear yet whether the SSDs made by YMTC will be aimed at the enterprise or consumer markets.

Phison has announced that its SSD controllers now support 3D NAND flash chips manufactured by Yangtze Memory Technologies Co., Ltd (YMTC), as per DigiTimes today. This latest development unlocks the door for SSDs with Chinese-made NAND to penetrate the storage market.

YMTC has been recruiting strategic partners to build its own ecosystem. Before the latest announcement, the Chinese manufacturer had already partnered with Adata and Silicon Motion. The addition of Phison is a key one, since Phison (like Silicon Motion) specializes in SSD controllers, which is a crucial component in SSDs.

YMTC was previously playing catch up to the other top NAND players on the market. However, the company's strong determination eventually led to the NAND maker transitioning from 64 layers to 128 layers, while entirely skipping the 96-layer phase.

According to DigiTimes, Phison's complete portfolio has been validated to support YMTC's 64-layer and looming 128-layer 3D NAND chips, with the latter based around YMTC's Xtacking 2.0 technology. 

Consumer storage is just a stepping stone though. Phison expects its partnership with YMTC to eventually extend to high-end storage, such as industrial embedded and enterprise products.

Having Adata on YMTC's side should certainly prove beneficial for the chipmaker. Adata, like countless other SSD vendors, doesn't make its own NAND chips and depend on third-parties, like Micron, Kioxia, Intel and etc 

YMTC's offerings look competitive on paper, and with the right pricing and incentives, we can expect other SSD manufacturers to eventually board the YMTC train.

Yangtze Memory Technologies Co., Ltd (YMTC) has revealed its X2-6070 and X2-9060 128-layer 3D NAND chips. The firm's previous offerings maxed out at 64 layers, so the X2-6070 and X2-9060 are a pretty significant milestone for YMTC and its efforts in the non-volatile flash memory space. 

QLC (quad-level cell) chips have grown very popular as they've opened the doors for SSD makers to offer high-density drives at very relatively low prices. YMTC has joined the foray of QLC NAND producers to provide another option for SSD vendors.

YMTC's latest chips are based on its proprietary Xtacking 2.0 architecture. The technology manufactures the interconnects on one wafer and the NAND stacks on another. Subsequently, YMTC employs an optical-based system to align the gazillion of holes with extreme precision and then fuse the wafers together. The greatest benefit of Xtacking is that YMTC can salvage the bottom parts and just slap a higher-stacked part on the top. Currently, YMTC is the only NAND manufacturer in the world to use this technology. 

The X2-6070 is a 128-layer 1.33Tb QLC 3D NAND chip. The X2-6070 has passed verification with various of YMTC's controller partners, meaning that it's ready for prime time. The X2-6070 isn't the only chip in YMTC's 128-layer portfolio though. The company also introduced the X2-9060, which is a 128-layer 512Gb TLC (triple-level cell) chip. YMTC claims that both chips can deliver a read and write performance up to 1.6 Gbps by applying a VCCQ voltage of of 1.2V. 

YMTC's X2-6070 should start appearing in future consumer SSDs very soon and eventually, the chip's usage will extended to enterprise SSDs as well. 

Samsung is betting on China. Reuters, citing Chinese state media, today said the company plans to invest another $8 billion in a NAND production facility in Xi'an.

The investment could allow Samsung to improve production of its NAND flash; it could also be an attempt by the company to curry favor with the Chinese government as it becomes increasingly hostile to foreign technology companies.

Either way, the additional investment might seem odd, given that Samsung's quarterly revenues declined between 50-60% year-over-year for all of 2019. Those drops were largely attributed to the memory market's continued pricing woes.

Samsung previously said it would limit memory production in an effort to keep pricing stable. That was in September 2018--the market's decline throughout 2019 shows how well that strategy worked. (Which is to say that, in many ways, it didn't.)

The company's also facing increased competition in the NAND market. Yangtze Memory Technologies, a China-based company, reportedly started volume production of 64-layer 3D NAND in September with plans to increase output in 2020.

Which means a company whose quarterly revenues have been halved for the last year because of declining memory prices that's facing increased competition--which could drive prices even further down--is investing $8 billion into a production facility.

And that's after the initial $10.8 billion investment as well as an additional $7 billion invested in 2017. Regardless of the motivation, that investment shows that Samsung isn't too concerned about the memory market, or at least does a good job hiding it.

Yangtze Memory Technologies Co. (YMTC) has reportedly started volume production of 64-layer 3D NAND. The triple-level cell chips with 256GB capacity use the company’s in-house Xtacking architecture for bonding two dies together.

It is the company's first process to go into high volume production. Digitimes’ sources indicate that the Chinese firm has gradually increased its 3D NAND yield and will be ramping its Wuhan factory to 100,000 wafers per month in 2020; although, that could further grow to 150,000 wafers per month. The sources also stated that its state-owned parent company, Tsinghua Unigroup, is constructing a 3D NAND memory fab in Chengdu with a similar wafer capacity, to come online in 2021-2022.

YMTC’s 256GB chips contain 64-layer TLC 3D NAND (which other companies started manufacturing in 2017) and are manufactured with its proprietary Xtacking architecture. The company unveiled the technology last year at the Flash Memory Summit. The chips are manufactured on two wafers. One wafer contains the ‘periphery’ CMOS logic, and the other one has the actual 3D NAND, based on common charge trap technology. The wafers are then bonded together with a process step, with billions of what it calls metal Vertical Interconnect Accesses (VIAs).

The benefit of this technology is a much more efficient use of die area. YMTC claims that die size is reduced by 25% because the area efficiency is over 90% for Xtacking, compared to less than 65% for conventional 3D NAND. It even estimates that at 128 layers, the periphery circuits would take up over 50% of the die area. Xtacking makes YMTC’s 64-layer 3D NAND within 80-90% the density of other’s 96-layer 3D NAND, it claimed. Other companies are also using or working on CMOS under the array technology though, albeit not by bonding two separate wafers.

Additionally, the company says that it allows for a modular approach to technology development, shortening product development by three months and reducing the manufacturing cycling time, the time the product is in the fab, by 20%.

Both wafers are manufactured by YMTC, with the logic wafer produced on a 180nm process. The architecture is also capable of a 3 Gbps I/O speed, which is over two times faster than common today and similar to DDR4. YMTC is working on multiple generations of Xtacking simultaneously; however, it intends to skip the 96-layer generation and move directly to 128 layers.

YMTC is a new, ambitious player in the NAND industry and plays a key role in China’s semiconductor ambitions. The company was founded in 2016 and has over 1,500 R&D engineers. Its CEO had previously worked at Intel and the manufacturing company XMC, now YMTC’s wholly-owned subsidiary.