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Business trends

Memory chip market set for a tumble as China moves in

Mega-producer of 3-D chips will have price-setting power

China's local governments offer memory makers strong financial incentives, enticing both established foreign firms and domestic companies looking to crack the high-end chip market.

TOKYO -- China's state-backed investment in cutting-edge memory chips could set global prices tumbling if output is not carefully controlled, repeating the boom-and-bust pattern of markets such as display panels and solar cells.

Yangtze Memory Technologies, an affiliate of state-owned semiconductor maker Tsinghua Unigroup, is poised to become China's first mass-producer of 3-D NAND flash memory chips, which offer vastly higher capacity than their conventional counterparts. "Two or three years ago, I wouldn't have believed it," said a salesperson at Japan's Advantest, which makes chip-testing equipment. "It seems like they will get things up and running at the end of 2018 and into 2019." 

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