China’s top flash memory chipmaker sees no easy way to replace US chipmaking gear, underscoring how a further crackdown on the supply of US technology would devastate the local semiconductor industry.
Yangtze Memory Technologies Co (長江存儲) gets more than 80 percent of its equipment from the US and Japan, said Zheng Jiuli (鄭久利), vice president in charge of supply chain management.
While some Chinese suppliers have made breakthroughs in areas, including etching and coating, there are not enough local alternatives to replace everything, he added.
“Long-term investments in innovation and R&D [research and development] have led to technological advantages” at US and Japanese suppliers, Zheng said.
“This is also the reason why their products are currently in the mainstream and are difficult to replace,” Zheng added.
The deficit of basic chipmaking equipment complicates Beijing’s ambitions to reduce its reliance on its geopolitical rival.
China has rolled out a number of measures to boost its domestic chip industry, including creating a US$29 billion semiconductor investment fund, and Beijing is planning to provide broad support for so-called third-generation semiconductors in its next five-year plan, Bloomberg News reported last week.
The manufacturing of these chipsets, which are mainly made of materials such as silicon carbide and gallium nitride, only has limited exposure to US vendors, Citigroup analysts have said.
Yangtze Memory has not set a target for domestic procurement, Zheng said, adding that it would be “unscientific” to do so.
The company operates a US$22 billion facility in Wuhan that is by far China’s most advanced factory for 3D NAND, the latest iteration of storage used in smartphones and high-end computing.
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