Friday, December 16th 2022
YMTC Could Abandon Market for 3D NAND Flash by 2024 Following US Government's Decision to Place It on Entity List, Says TrendForce
Global market intelligence firm TrendForce states that Chinese memory manufacturer YMTC is now at risk of exiting the market for 3D NAND Flash products by 2024 following its formal placement on the Entity List of the US Commerce Department on December 15. From this point forward, the Commerce Department will be reviewing and approving individual transactions related to the exportation, re-exportation, and sales of equipment, technologies, and other related goods from the US to YMTC. With acquisitions of equipment parts and technical support from its US partners becoming very difficult and prolonged, YMTC is going to be severely constrained from raising its bit output. Hence, its foothold on the market for 3D NAND Flash products is expected to weaken as time goes by.
TrendForce points out that without the support of the key equipment providers, YMTC is now facing a huge technical obstacle in the development of its latest 3D NAND Flash technology known as Xtacking 3.0. In particular, raising yield rate for the 128L and 232L processes is going to be extremely challenging for the Chinese memory manufacturer. Taking account of this latest escalation in the US-China trade dispute, TrendForce has further corrected down its projections on YMTC's supply bit growth rate and the total NAND Flash supply bit growth rate for next year. YMTC supply bits were initially forecasted to grow by 60% YoY for 2023. However, there was a massive downward correction that put its growth rate at just 18%. Now, YMTC is forecasted to post a YoY decline of 7%, which is a complete reversal from the earlier projections.
International Clients Are Gradually Reallocating Orders to Other NAND Flash Suppliers
Besides the impact of the Entity List on YMTC's output growth, TrendForce has also observed that NAND Flash buyers outside of China now harbor significant reservations about adopting YMTC's technology. A US-based smartphone brand has hold off on procuring mobile storage solutions from YMTC. At the same time, PC OEMs that were previously going to qualify YMTC's client SSDs have temporarily halted the customer sampling and adoption process. Based on the latest investigation, TrendForce believes that YMTC will likely be limited to operating only within Mainland China in the future. Moreover, since the Chinese memory manufacturer is being seriously hindered in its efforts to advance towards higher-layer 3D NAND technologies, it will eventually lose out on opportunities to gain more market share via capacity expansion activities.
After its placement on the Entity List, YMTC could be further prevented from acquiring the critical equipment if the US government opts to broaden the scope of its export control rules. For instance, there is a likelihood that Dutch and Japanese equipment providers will join the US sanction regime and stop selling DUV immersion lithography systems to Chinese customers.
TrendForce notes that by 2024, YMTC's competitors will have transitioned to the 2XX-L generation for their primary 3D NAND processes. They might even start manufacturing NAND Flash products that have a layer count that is approaching the 300 threshold. Conversely, YMTC will have gradually lost its cost competitiveness due to technological stagnation, and the erosion of its market share will continue. To avoid this fate, YMTC will have to find ways to get delisted. TrendForce is also not ruling out other alternative paths for YMTC as well. For instance, the company can go back to manufacturing 2D NAND Flash, or it can transform into a supplier for logic ICs that are made with mature process technologies.
Supply-Demand Dynamics of NAND Flash Market Is Now Expected to Improve in 2H23 and Thereby Help Stabilize Overall NAND Flash ASP
Since YMTC's YoY supply bit growth rate for 2023 has been drastically revised to negative 7%, the YoY growth rate of the total NAND Flash supply bits in the same year has been lowered as well to 20.2%. Correspondingly, the sufficiency ratio of the whole NAND Flash market for the entire 2023 has been revised to 2.3% from the original projection of 3.6%. Besides the moderation in supply bit growth, TrendForce is also optimistic that procurements will pick up for enterprise SSDs thanks to the price elasticity of demand. Moreover, TrendForce is not ruling out the possibility that the overall NAND Flash supply will start to tighten in 2H23. Electronics brands (OEMs) could begin ramping up NAND Flash procurements ahead of time in 2Q23. The rising demand, in turn, could lead to a stabilization of NAND Flash prices during 2Q23 and an eventual rebound in the overall NAND Flash ASP starting in 3Q23.
TrendForce points out that without the support of the key equipment providers, YMTC is now facing a huge technical obstacle in the development of its latest 3D NAND Flash technology known as Xtacking 3.0. In particular, raising yield rate for the 128L and 232L processes is going to be extremely challenging for the Chinese memory manufacturer. Taking account of this latest escalation in the US-China trade dispute, TrendForce has further corrected down its projections on YMTC's supply bit growth rate and the total NAND Flash supply bit growth rate for next year. YMTC supply bits were initially forecasted to grow by 60% YoY for 2023. However, there was a massive downward correction that put its growth rate at just 18%. Now, YMTC is forecasted to post a YoY decline of 7%, which is a complete reversal from the earlier projections.
Besides the impact of the Entity List on YMTC's output growth, TrendForce has also observed that NAND Flash buyers outside of China now harbor significant reservations about adopting YMTC's technology. A US-based smartphone brand has hold off on procuring mobile storage solutions from YMTC. At the same time, PC OEMs that were previously going to qualify YMTC's client SSDs have temporarily halted the customer sampling and adoption process. Based on the latest investigation, TrendForce believes that YMTC will likely be limited to operating only within Mainland China in the future. Moreover, since the Chinese memory manufacturer is being seriously hindered in its efforts to advance towards higher-layer 3D NAND technologies, it will eventually lose out on opportunities to gain more market share via capacity expansion activities.
After its placement on the Entity List, YMTC could be further prevented from acquiring the critical equipment if the US government opts to broaden the scope of its export control rules. For instance, there is a likelihood that Dutch and Japanese equipment providers will join the US sanction regime and stop selling DUV immersion lithography systems to Chinese customers.
TrendForce notes that by 2024, YMTC's competitors will have transitioned to the 2XX-L generation for their primary 3D NAND processes. They might even start manufacturing NAND Flash products that have a layer count that is approaching the 300 threshold. Conversely, YMTC will have gradually lost its cost competitiveness due to technological stagnation, and the erosion of its market share will continue. To avoid this fate, YMTC will have to find ways to get delisted. TrendForce is also not ruling out other alternative paths for YMTC as well. For instance, the company can go back to manufacturing 2D NAND Flash, or it can transform into a supplier for logic ICs that are made with mature process technologies.
Supply-Demand Dynamics of NAND Flash Market Is Now Expected to Improve in 2H23 and Thereby Help Stabilize Overall NAND Flash ASP
Since YMTC's YoY supply bit growth rate for 2023 has been drastically revised to negative 7%, the YoY growth rate of the total NAND Flash supply bits in the same year has been lowered as well to 20.2%. Correspondingly, the sufficiency ratio of the whole NAND Flash market for the entire 2023 has been revised to 2.3% from the original projection of 3.6%. Besides the moderation in supply bit growth, TrendForce is also optimistic that procurements will pick up for enterprise SSDs thanks to the price elasticity of demand. Moreover, TrendForce is not ruling out the possibility that the overall NAND Flash supply will start to tighten in 2H23. Electronics brands (OEMs) could begin ramping up NAND Flash procurements ahead of time in 2Q23. The rising demand, in turn, could lead to a stabilization of NAND Flash prices during 2Q23 and an eventual rebound in the overall NAND Flash ASP starting in 3Q23.
40 Comments on YMTC Could Abandon Market for 3D NAND Flash by 2024 Following US Government's Decision to Place It on Entity List, Says TrendForce
I find it very suspicious how some people don't understand something so obvious.
I mean between China and India that's almost 1/4 of earths population. Seems like a pretty big market to me??
Assuming you are a US citizen (if not, dunno why you'd care for "national" concerns), I suppose that's why you vote for representatives?
www.bbc.com/news/business-54100001
The west ever increasingly just can't compete. And it's their own greed which made China into a much bigger dragon, now they can't seem to control it.
The fact of the matter is YMTC went from no NAND products to having equivalent products to the worlds best in 6 years. That's clearly not from investment, it's stealing from other companies. No complete newcomer to the NAND industry can do that much in 6 years, it's impossible.
China can't even be bothered to condemn the humanitarian crisis in Ukraine perpetrated by the Russians, their current form of government is incapable of leading the world. A world leader does not need to euthanize portions of their population or control every bit of information their citizens hear. I hope the Chinese people free themselves from the shackles of the CCP.
Do you want a thread where everything is peachy'keen?
I'm tired of people excusing trolling as free speech, there are limitations to free speech in the real world. These people behave this way online because they know they can get away with it and it's ruined so many online communities. The number of bad actors has increased meanwhile systems in place to prevent these bad actors have remained stagnant, hence why the quality of online conversations has taken a nose dive. When I say bad actors I'm not only referring to your garden variety trolls but also foreign governments and corporate campaigns.
People quickly forget that lack of structure is chaos, not freedom. In such a scenario regular people loose. Rights have limits because there is a point where your right to free speech infringes on other people's rights.
To be honest I just scrolled past the trolls because I usually just ignore the trolls seeing us how if you feed them it makes them stronger. Your statement is more dangerous so it caught my eye.
Remember when Jean Paul said that hell is other people. Freedom is something other people can only take away not give you.
Freedom of speech is enduring the trolls and if you want to you can engage with them and outtroll them and smash them with your wit and cunning. But to ban people for being annoying or trolling is different from misinformation/disinformation or even different from government bad faith actors. These are three very different categories.
If they are from another government trying to incite chaos then they should absolutely be banned, that's espionage.
If someone is posting misinformation or disinformation and that leads to harm or slander that's illegal. If not, they are as credible as a lunatic speaking to themselves on a street corner and should ignored. If you think during the pandemic that everyone said that the vaccines would prevent transmission and protect you from the virus that was misinformation given by the people in the highest positions of power with the most legitimacy. So, how do you define misinformation it seems whoever is in power gets to decide what is and what is not science or facts.
But if you're saying people have opinions that you disagree with and they're being vulgar Baroque impolite and hostile, I think that's their right to be unpleasant.
Can I ask you to talk about a specific comment from one of the trolls that you felt was over the line?
Also, thank you for taking the time to respond. Hope you have a good holiday.
This is part of the problem, people on the internet have a tendency to misrepresent what is said or take everything as absolutes. A intentional effort to ignore the whole to fashion small nuggets of truth to one's own narrative.
And if by "peachy'keen" you mean troll free, yes. I like the rules enforced.And the rules disagree. I for one am glad for that just wish enforcement was a little more aggressive on repeat offenders.
I'm not sure questioning efficacy and statements made about the efficacy for example "if you get the vaccine your protected from the virus and it stops with you." I think I've heard some pretty high ranking citizens postulate an approximation of that statement and I'm not sure if it encapsulates the absolutist argument your saying someone must take in order to determine its veracity. All caps something doesn't make it factual.
I agree about civil discourse, and if someone is using hate speech, vulgarity, or being otherwise crass beyond a socially acceptable standard of etiquette or a private companies rules. However who gets to decide what is polite speech for polite society? Did you read the news about the FBI having council on twitter? Ira Glasser is a personal hero of mine because of his principles toward the constitution.
Absolutists you mention are not in one category either. Is just being ignorant and wrong considered disseminating misinformation? Then nobody would dare be wrong and follow the right information. Who makes the information?
Which people made you feel like they were trolling anyway? As someone who lived in China for a decade and is fluent in Mandarin, political science regarding China is of interest to me. The comments here are common and predictable.