In addition to being the largest flash memory manufacturer in China, YMTC is also quite advanced from a technical perspective, as its 232-layer 3D NAND chips are ahead of competitors’ products in terms of information storage density. At the same time, increasing sanctions are forcing the company to raise more and more capital for its development – the bill runs into billions.
Accordingly Financial TimesLast year, YMTC was expected to raise $7 billion from a group of investors including the so-called “Big Fund” controlled by the Chinese government. In October last year, US authorities restricted the supply of equipment to China that allows the production of 3D NAND memories with more than 128 layers, but in December the situation worsened with targeted US sanctions against the YMTC company itself .
All of this is forcing the Chinese memory maker to raise capital more aggressively this year. Knowledgeable sources told the Financial Times that the bill ran into billions of dollars and the company eventually managed to exceed its initial funding target. Last year’s $7 billion was quickly spent on necessary expenses such as purchasing equipment and developing the necessary equipment to produce memory chips under sanctions. The company had to start fundraising less than a year after the previous round. According to knowledgeable sources, domestic investors have outperformed the YMTC capital increase program this year. It is noteworthy that the company’s chief executive officer, Chen Nanxiang, chaired the China Semiconductor Industry Association last week.
According to some Chinese government sources cited by the Financial Times, YMTC is following in Huawei’s footsteps and consolidating the domestic semiconductor industry in the face of new American sanctions. If the equipment required for the development of YMTC cannot be purchased externally, the company is willing to assist domestic suppliers in the development. In this area we are already working with the Chinese device manufacturers Naura and AMEC. According to recently published statistics, in the first eight months of this year, about half of orders for the supply of chip production equipment in the domestic market went to Chinese manufacturers. With relatively simple equipment, the process of import substitution is faster; Problems arise when looking for an alternative to the most advanced devices.