The race for the leading edge in flash memory heats up with credible expectations of YMTC’s imminent entry
In October 2023, YMTC shocked the NAND flash memory industry by being the first company in the world to launch 232-layer quad-level cell (QLC) 3D NAND memory in a consumer product. TechInsights reviewed and tested the ZhiTai Ti600 1TB solid state drive (SSD) and confirmed that YMTC has beat competitors Micron, Intel, and Samsung to claim the leading edge with its 232-layer QLC 3D NAND device.
First, some important industry context and company history is needed.
NAND flash memory is a type of memory that can store data even when the power is off. This is in contrast to DRAM, which are those sticks of memory that go into your desktop PC, a type of memory that requires the power to be on and resets every time the power is turned off. NAND has become ubiquitous- starting from use cases such as USB flash drives and SD cards- to replacing hard disk drives (HDD) with solid state drives (SSD) in your PC to being the primary form of storage in your smartphone. In the case of YMTC, the first confirmed product is a consumer 1TB SSD.
Founded in 2016, Yangtze Memory Technologies Corp (YMTC) is China’s leading semiconductor manufacturer specialized in flash memory chips. However, don’t let the fact that YMTC is only 7 years old fool you. It was spun off from Tsinghua Unigroup which is a holding company of over 200 subsidiaries ranging from education to finance to tech. YMTC is populated by industry veterans who have spent their entire careers pursuing the leading edge in this specialized subsector of the semiconductor industry. Thus, it shouldn’t be surprising that YMTC would achieve this major breakthrough eventually.
Indeed, the true surprise is not that YMTC achieved this technological breakthrough, it’s that it broke through the United States’ high-tech blockade of China. In October 2022, the United State enacted export controls on China in an attempt to freeze China’s high-tech sector in its then stage of development by forbidding U.S. companies and any foreign company using U.S. origin IP (such as ASML), from exporting or servicing the most advanced chip-making equipment to China. This “October Surprise” caught Chinese chipmakers off guard and hit YMTC especially hard. Just weeks after the implementation of the export controls, TechInsights reported a major disruptive event in 3D Flash Memory: YMTC was poised to become the world first in launching 232-layer 3D NAND Flash, ahead of industry giants Samsung, SK Hynix, and Micron.
However, all throughout 2023, there were industry rumors that YMTC was testing domestic Chinese chip-making equipment. Still, the expectation was that Chinese chip-making equipment was still lagging that in the West, and YMTC would be limited by chip fabrication equipment and only be able to produce at scale less advanced 128-layer 3D NAND flash memory despite clearly already possessing 232-layer 3D NAND chip design expertise. Thus, just 1-year after the unilateral imposition of U.S. economic sanctions, YMTC has disrupted the industry once again by showing that it is indeed capable of producing at scale 232-layer 3D NAND flash memory, and Chinese chip fabrication equipment suppliers are high enough quality to support YMTC.
The implications and potential benefits to the broader tech industry are huge. It’s been clear from the past decade that the industry is moving increasingly towards the cloud. Compared to on-site computing, cloud computing is far more flexible, scalable, and efficient for most applications. Incorporating flash memory based SSDs into the server farms that form the cloud results in faster read, write, and erase times; lower power consumption; and greater reliability, endurance, and lifespan. More competition among flash memory producers results in lower prices and greater accessibility of advanced NAND Flash. This in turn, helps lower both the buildout as well as ongoing operating costs (through greater electricity consumption efficiency) of the cloud, which in turn results in cheaper cloud computing costs for both startups and establish companies. It could also have disinflationary pressure on consumer electronics such as smartphones or even connected edge computing devices. A key characteristic of Chinese manufacturers is that they build huge capacities to fully exploit efficiencies of scale. A relevant example is China’s approach towards solar panels, which are themselves a type of semiconductor. Wood Mackenzie estimates that by 2026, China will account for 80% of the entire world’s solar manufacturing capacity and this unimaginable scale is the key driver behind the global plummeting cost of solar modules.
If YMTC is truly capable of producing its 232-layer QLC 3D NAND memory at large-scale, then cheap, high-quality, reliable storage would be available to all- just in time to supply the world’s demand for enormous data needed to train AI.
