Although YMTC produces highly competitive 3D NAND devices, it faces major difficulties winning market share. This is because it struggles to expand its production capacity due to U.S. export restrictions on advanced tools made by American companies, according to SisaJournal-E. As a result, YMTC’s market share fell below 5% in the second quarter of 2025, reversing years of steady growth.
"YMTC had been steadily increasing its market share until a few years ago, but that is no longer the case," said Choi Jeong-dong, Vice President of TechInsights, at the SEMI Members Day Forum. "Even though they developed cutting-edge technologies like Xtacking 4 (300+ layers) and were the first to adopt hybrid bonding in NAND — which they still use — they can no longer expand their fabs due to U.S. sanctions."
The Chinese memory manufacturer had seen consistent momentum since 2019, when it began mass-producing 64-layer 3D NAND. From holding less than 1% of the global market share in 2020, YMTC climbed past the 5% mark by 2023, positioning itself as a rising competitor to established players such as Kioxia, Micron, Samsung, SanDisk, and SK hynix.
However, that progress began to falter in the latter half of 2023, after the U.S. government imposed export restrictions on advanced wafer fab equipment made by American companies, such as Applied Materials, KLA, or Lam Research.
A primary reason for the slowdown of YMTC's market share expansion is its inability to increase its manufacturing capacity. The company is blocked from sourcing crucial equipment, such as deposition and etching tools. These restrictions, imposed by the U.S. government, have prevented YMTC from upgrading its production lines or building new ones, according to TechInsights.
The situation is worsened by the complete withdrawal of multinational wafer fab equipment (WFE) vendors from servicing tools at YMTC's Wuhan fabrication site. This exit has left the company without external support for tool installation, calibration, or maintenance. As a result, even if YMTC develops new process nodes internally, it will take a longer time to ramp to mass production, as it will have to use R&D engineers to adjust the tools used for mass production.
Speaking of R&D, YMTC continues to invest in research and development. The company has already initiated production of its 5th Generation (Xtacking 4.0) 3D NAND devices and is working on its 6th Generation (Xtacking 5.0), although no details are available.
TechInsights believes that attempts by the Chinese government to accelerate the development of domestic manufacturing tools have not yet produced viable alternatives. However, YMTC is among the leaders in the transition to China's homegrown chipmaking tools; yet, it remains to be seen whether the company can successfully implement these tools and increase its production capacity. So far, the performance of such tools has been considerably lower compared to equipment from market leaders.
For now, tools currently installed at YMTC's fab in Wuhan are showing signs of age, further limiting YMTC’s options, according to TechInsights. Although the company had previously managed to sustain output and technological advances despite sanctions, the cumulative effect of the restrictions is now becoming visible, especially as rivals continue to invest in new fabs equipped with the latest tools.
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