Chinese Flash Maker Slashes Jobs Amid Sanctions

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(Image credit: YMTC)

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.

Andrew E. Freedman is a senior editor at Tom's Hardware focusing on laptops, desktops and gaming. He also keeps up with the latest news. A lover of all things gaming and tech, his previous work has shown up in Tom's Guide, Laptop Mag, Kotaku, PCMag and Complex, among others. Follow him on Threads @FreedmanAE and Mastodon

  • evdjj3j
    "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"

    You load 16 tons, what do you get? Another day older and deeper in debt.

    I'm so glad I wasn't unfortunate enough to be born in China.