Chip Toolmakers Cut Off China's YMTC: No More 3D NAND

Xtacking 3.0 promo image
(Image credit: YMTC)

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.

Anton Shilov
Freelance News Writer

Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

  • escksu
    Lets see if YMTC is able to reverse engineer their existing equipment. If so, then there is no need to foreign equipment anymore.

    Sanctions are actually a good thing. There is never a need for China and USA to be friends. Never a need to trade with each other as well. Its good to trade but nor a must.

    Also globalisation is not exactly a good thing. It only make countries overly dependent of others to survive.
    Reply
  • watzupken
    Another day, another sanction in the name of national security by the US. In my opinion, this sort of sanction hurt at the start. When you consider the financial might and ability to replicate technology quickly, it is a matter of time they will have no or few dependencies on "US technology". Longer term, I think this is going to hit US harder because they will not get the business back and they can't do anything much other than crying out "copyright infringement/ stealing of technology".
    Reply
  • mitch074
    And now China will develop their own tooling, the USA won't sell anymore because Chinese knock-offs will catch up then overtake US-made ones (because why spend on R&D if you don't sell), and then complain that China "stole" their tech.
    Who's winning there?
    Reply
  • The Historical Fidelity
    mitch074 said:
    And now China will develop their own tooling, the USA won't sell anymore because Chinese knock-offs will catch up then overtake US-made ones (because why spend on R&D if you don't sell), and then complain that China "stole" their tech.
    Who's winning there?
    By the time China produces a working clone of existing US tech it will be obsolete.
    Reply
  • George³
    The Historical Fidelity said:
    Докато Китай произвежда работещ клонинг на съществуващата американска технология, той ще бъде остарял.
    Why do you think that after China pours cool billions into development, it will necessarily make clones of an outdated and outdated architecture and not go its own way?
    Reply
  • The Historical Fidelity
    George³ said:
    Why do you think that after China pours cool billions into development, it will necessarily make clones of an outdated and outdated architecture and not go its own way?
    Give me one technology that China has R&D’ed that is not either a clone, direct copy of other nations technology, or based on corporate espionage of another nations intellectual property?
    Reply
  • George³
    The Historical Fidelity said:
    Дайте ми една технология, която Китай е разработил и която не е нито клонинг, нито директно копие на технология на други нации, нито базирана на корпоративен шпионаж на интелектуална собственост на други нации?
    This is not answer of my question. :)
    I waiting with attention for answer if you decide to write it.
    Edit: translate first part of my post to English.
    Reply
  • The Historical Fidelity said:
    Give me one technology that China has R&D’ed that is not either a clone, direct copy of other nations technology, or based on corporate espionage of another nations intellectual property?
    Exactly this. In order to make the kind of chips that can compete with us. They would need to be able to buy ASML equipment or to duplicate it and they are at least 10 to 20 years behind. ASML has cut them off there’s no EUV for them.

    let them pour billions into it and see how far they get. They’ll just get broke. Where do folks think they get their money? Do they think they print their own ?

    China does not create China steals, and if anyone is caught, selling them any technology, they shouldn’t have there should be extreme repercussions
    Reply
  • The Historical Fidelity
    George³ said:
    Това не е отговор на въпросите ми. :)
    I waiting with attention for answer if you decide to write it.
    I’m sorry your last post was all in Slavic script, so I don’t know what you are asking
    Reply
  • George³
    The Historical Fidelity said:
    I’m sorry your last post was all in Slavic script, so I don’t know what you are asking
    Done, problem was onlive translate from my android phone. My language is Bulgarian.
    Reply