U.S. Mulling Crackdown on China's 3D NAND Production

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.

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Anton Shilov is a contributing writer at Tom’s Hardware. 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.

4 Comments Comment from the forums

TheOtherOne

Looks like most of the big US companies finally moved all of their sweat factories from China to somewhere in African countries! :rolleyes:
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bit_user

Is this part of the new CHIPS act? The Reuters article mentions it, but doesn't seem to clearly state whether it's due to this clause in the legislation or something completely separate:

Chipmakers that take money under the measure would be prohibited from building or expanding manufacturing for certain advanced chips, including advanced memory chips at a level to be determined by the administration, in countries including China.

That part of the CHIPS act makes sense, if you consider that the legislation is a taxpayer subsidy to ensure significant domestic production capacity. It would therefore be self-defeating if it ended up being used to subsidize fab production or expansion in China.
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_Shatta_AD_

bit_user said:
Is this part of the new CHIPS act? The Reuters article mentions it, but doesn't seem to clearly state whether it's due to this clause in the legislation or something completely separate:

That part of the CHIPS act makes sense, if you consider that the legislation is a taxpayer subsidy to ensure significant domestic production capacity. It would therefore be self-defeating if it ended up being used to subsidize fab production or expansion in China.

No, this has nothing to do with the CHIPS act. It is in addition to previous measures against Chinese fabs making 14nm or smaller nodes. It applies to all American companies exporting say tech tools to China regardless whether they took money from CHIPS or not. It’s just America rearing its ugly head in anti-competitive strategies and finally laying their dirty hands bare with a near blanket ban of current gen tools in an attempt to throw China back to the 80s.
This is all so that American tech companies can keep charging an arm and a leg for cleverly advertised products as often as they like.
They make one small tweak to the firmware every year to improve performance by 0.99% and call it Gen X.0 coming with a 15% premium. GL!
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bit_user

_Shatta_AD_ said:
It’s just America rearing its ugly head in anti-competitive strategies and finally laying their dirty hands bare with a near blanket ban of current gen tools in an attempt to throw China back to the 80s.
This is all so that American tech companies can keep charging an arm and a leg for cleverly advertised products as often as they like.
That's if they do it. It's just a rumor, at this point. Might want to save some of that moral outrage for when it actually happens (assuming it does).

FWIW, I support some kind of retaliation for China's rampant industrial espionage, dumping, and other aggressive trade practices. If it's done in that context, then I could support it. However, I don't like to see such measures as this supposed export ban taken for purely competitive reasons.
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