U.S. Department of Commerce sanctions on China, how will it affect the Korean memory market?

TrendForce “Gradually reduce production in China of the Big 3 Memory”

Attention is focused on how the U.S. Department of Commerce’s sanctions on semiconductor exports to China will affect the domestic memory industry.

It is said that the US Department of Commerce will decide whether to allow export of foreign companies that produce memory semiconductors in China through a separate examination on a case-by-case basis. Currently, the only foreign companies producing high-performance memory semiconductors in China are South Korean Samsung Electronics and SK Hynix. Samsung Electronics has a NAND flash plant in Shaanxi Province, China, and SK Hynix is ​​operating NAND flash and DRAM production facilities in Dalian and Wuxi, respectively.

On the 10th, TrendForce, a market research firm, analyzed the impact of sanctions by the U.S. Department of Commerce on the memory semiconductor industry.

The companies that will be hit the hardest by the sanctions are Chinese memory semiconductor companies YMTC (Yangtze Memory) and Changshin Memory (CXMT).

First of all, in the case of DRAM, CXMT has the highest market share among Chinese companies in the domestic DRAM market.

According to TrendForce, CXMT is attempting to switch from a 19nm process to a 17nm process in the second quarter of this year. However, a direct blow is inevitable as the US Department of Commerce announced that it will restrict the import of equipment into China in the case of 18-nm or smaller processes in the DRAM field.

Korean companies are also expected to be partly affected. SK hynix is ​​producing 1y nano-class DRAM at its C2 plant in Wuxi, China. It is a large-scale plant that accounts for regarding 13% of global DRAM production. It is known that the US government has consulted in advance so that Korean companies can maintain their existing production as they are. However, in order for SK hynix to bring new DRAM equipment to the Wuxi plant, it must get approval on a case-by-case basis.

In the case of NAND flash, it is more strict. Equipment used to manufacture 3D NAND flash products with 128 layers or higher requires prior approval before importation. In China, the main NAND flash market is YMTC. Currently, YMTC is planning to develop 200-layer or higher 3D NAND flash, but it is expected to be greatly affected by this sanctions. In addition to Chinese companies, plans to relocate Samsung Electronics’ Xi’an plant and Solidigm’s Dalian plant acquired by SK Hynix are also likely to have an impact.

TrendForce analyzed, “Due to the sanctions, global memory semiconductor companies such as Samsung Electronics and SK Hynix will make efforts to reduce the proportion of production in China and increase their domestic production capacity.”

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