TAIPEI -- China-backed Yangtze Memory Technology said on Tuesday it will be able to produce on a large scale an advanced flash memory chip that it has developed from 2019, a significant move for the country's budding industry as the company takes on market leaders such as Samsung Electronics, Toshiba and SK Hynix.
Yangtze Memory, China's first NAND memory chipmaker and an affiliate of Beijing-sponsored Tsinghua Unigroup, unveiled its own flash memory structure called Xtacking, a 64-layer or even more advanced 3D NAND flash memory technology that it claimed would stand out compared with industry standards now.
Chief Executive Simon Yang said in a statement that the new chip offers "faster transmission speed and higher performance" than existing products.
He said Xtacking will "be a game changer" and produced from 2019, marking what industry experts say is a meaningful breakthrough for China that will help it achieve its dream of becoming a dominant global player.
Yang will demonstrate use of the chip on Aug. 7 at the annual Flash Memory Summit, the most prominent industry event at Silicon Valley, even though the semiconductor industry is caught between the rising trade and technology jousting between China and the U.S.
NAND flash memory is crucial to every electronic device acting as information storage. The world's NAND flash memory market is dominated by six international players -- Samsung, Toshiba, Western Digital, SK Hynix, Micron and Intel.
Washington has repeatedly accused China of technology theft as Beijing continues to pour funds into efforts to build a competitive chip industry. The current escalating trade tension and technology cold war launched by President Donald Trump's administration to curb Beijing's ambitions are spurring some Chinese companies to accelerate their technology development.
Yangtze Memory has bought talent from many global players including Samsung, SK Hynix, Micron, Western Digital and Nanya Technology. It has already built a team of over 3,000 staff since it was established in 2016 and operates offices in Silicon Valley, Japan and many Chinese cities.
Its $24 billion production site, the biggest and the first advanced memory chip factory in China, is under construction in Wuhan. On April 26, immediately after the U.S. banned ZTE from using American technology, Chinese President Xi Jinping visited the Wuhan site and stressed "the importance of developing and enhancing basic technology locally."
Yangtze Memory plans to start producing 32-layer 3D memory chips by the end of the year, four years after Samsung developed the technology. The Nikkei Asian Review reported that as early as February this year, Apple, the biggest consumer of the world’s NAND flash chips, had already approached Yangtze Memory to see if it could become a qualified supplier in the future.
Yet, Yangtze Memory is entering the market during a time of glut. The NAND flash memory market has been oversupplied since the beginning of the year and prices that have already contracted by 20% to 30% from last year are expected to fall through 2019.
Avril Wu, an analyst at Taipei-based research agency DRAMeXchange, said China's first NAND flash memory chipmaker still face challenges ahead but recognized that it has made a technology breakthrough as a new player in the market.
"It makes a good progress but there are roadblocks ahead for Yangtze Memory to put its chip design into mass production," said Wu. " We expect they will have chips out in the market by the second half of 2019. But the quality of the chips still need to be seen and qualified."
But Wu added: "It doesn't care about market downtrends -- making profits is not its priority as it would receive great subsidies from the government. The top priority currently is to prove to the industry that it can produce such memory chips in-house."
