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.
