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.
