what the industry can expect

A couple of weeks ago

we wrote

that the cost of electronic components changes course from a rise in price and a fall in demand to a reduction in price. According to TrendForce experts, in the next quarter, consumer drives will fall in price by 8-13%. And then prices can drop even more.

At the same time, we said that all these predictions would come true if there were no new factors that would affect NAND pricing. Well, now, it seems, these factors have appeared. About what this can lead to and what to expect – under the cut.



What’s the new problem?


It’s all about the trade wars between the US and China. The other day, it was announced that the States are planning to ban the export to China of specialized systems for the production of NAND chips. The Celestial Empire is becoming a stronger player (if not already the strongest), and it seems that not everyone likes it.

As you know, any companies that are related to the supply of lithographic equipment for the production of modern chips have already been banned from cooperating with China. The US also put pressure on TSMC to ban Chinese companies. In general, this plan was successful, which led to the current crisis in the semiconductor component industry.

China, however, has developed its own chips, architecture for them and related technologies. But now a new problem is a possible ban on the supply of equipment for the production of NAND chips. They are used not only for the production of SSD drives. Chips are installed in almost all smart devices, including smartphones, watches, cameras, tablets, PCs, etc.

In the USA now implement their own import substitution plan, and competitors like China are trying to take the country out of the game. The other day it became known about the approval of the US Senate bill, which is aimed at supporting domestic electronics manufacturers. Support is provided through tax cuts in relevant industries and funding for research organizations that are engaged in specialized projects. In addition, funds are allocated for the construction of factories that will produce semiconductor elements and electronic systems. The United States has the technology, but there are almost no factories that produce modern chips for them. The US share of the semiconductor components market is now only 12%.

Is the threat real?


Quite. The fact is that the equipment for the production of these chips is produced by American companies. This, of course, is about the most modern chips. And the United States plans to ban this equipment from export to China. Not all, but what allows you to produce NAND chips with more than 128 layers. This equipment is exported by Applied Materials and LAM Research Corp.

By the way, it is also used by American companies Western Digital and Micron, which own 13% and 11% of the global NAND chip market, respectively.

It is difficult for American companies to compete with the Chinese, as they cut prices. The purpose of the Celestial Empire is clear – the lower the prices, the more customers will contact them. Well, after the Chinese get a significant part of the market, then prices can be raised, at least slightly. It will be difficult for customers to rebuild supply chains and business processes. The Chinese are generally masters of closing such chains on themselves, there is no doubt about it.

Competitors from China


The main competitor is Yangtze Memory Technologies Co. (YMTC), which is a leading manufacturer of memory chips in China. Back in early 2021, she announced that

plans to double

the scale of production of NAND chips. Then it became known that the company was going to compete with technology giants Samsung and Micron. And in the same year, she launched a pilot production of 192-layer 3D NAND memory.

According to representatives of YTMC, it was not easy to create a production line for new chips, but they succeeded. As a result, even the American corporation Apple became interested in this memory, which can choose chips for installation in its own devices.

At the end of 2022, YMTS plans to launch a second plant. These are not just plans – the site is almost ready, now industrial equipment is being installed on it. The plant’s capabilities are impressive – it will be able to process over 200,000 300mm wafers with SD NAND chips every month. By the end of 2023, the Chinese company is going to get about 7-8% of the global market for the production of NAND chips, supplying about 200 thousand silicon wafers per month, which will just help to fully load the new plant.

It’s not just China that will have problems.



https://habr.com/ru/company/selectel/blog/571880/image
The fact is that many other corporations use the services of Chinese companies. For example, right now the South Korean corporation Samsung is building its factories in China. And just for the purpose of producing NAND chips. The Koreans do not seem to be under sanctions, but if the US implements its plan, then they will not be able to use modern equipment for the production of chips.

In addition, another Korean company will suffer – SK Hynix, which relatively recently agreed with Intel on the purchase of the latter’s production facilities for the production of flash memory.

Russia can also be hooked. Most recently, the domestic company Kraftway agreed with YMTC on the supply of the latest controllers for SSD drives. And if something happens to the Chinese partner, then plans to sell hundreds of thousands of controllers to him may also suffer. Moreover, Russian organizations, including government agencies, were going to buy SSD drives with Russian controllers from YMTC.

In addition to the Chinese, the domestic company was going to sell controllers to the American company Micron and the Japanese Toshiba. If the US plans are implemented, then problems will also arise here.

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