The US is reportedly mulling a ban on shipments of US chipmaking equipment to memory chip producers in China, in what Chinese analysts call an extension of a crackdown on Chinese semiconductor development, and another desperate, strengthened effort to curb China's technological rise.
Analysts cautioned that the move, with a clear intention of supporting US firms that are losing market share, could also force industry dominant firms such as Samsung and SK Hynix to "choose sides," since they have been increasing their footprints in the world's second-largest economy in recent years.
The US is considering limiting shipments of US equipment to memory chip makers in China, including Yangtze Memory Technologies Co (YMTC), Reuters reported on Monday, citing four people familiar with the matter.
Under the action being considered, US officials would ban the export of tools - mainly produced by US firms LAM Research and Applied Materials - to China that are used to make NAND chips with more than 128 layers, according to the report, citing two of the sources.
"If such tools are not allowed to be exported to China, it will inevitably hurt memory chip makers' production ability in the short run, especially those who 'run faster' like YMTC," Li Zheng, associate research fellow at the Institute of American Studies at the China Institutes of Contemporary International Relations, told the Global Times on Tuesday.
YMTC accounts for about 5 percent of global NAND flash memory chip production, almost double from a year ago. US counterpart Western Digital accounts for about 13 percent and another US-based firm, Micron has 11 percent, according to Walt Coon of consulting firm Yole Intelligence.
However, Li noted that the technical barriers of memory-related chip tools are relatively lower than for others, so the time needed for tool replacement will be shorter, indicating that the impact will be relatively limited.
Sources Reuters cited, who spoke on condition of anonymity, also pointed out that the crackdown may hurt South Korean memory chip juggernauts Samsung Electronics and SK Hynix - both have factories in China and rely on US chipmaking equipment.
Observers told the Global Times that the reported US move will put South Korean giants in a more difficult position, as their memory chip industry chains are more integrated with the Chinese mainland market, and relied on Chinese demand.
"The US is trying to force South Korean giants to pick sides through the latest move, to finally establish a small circle to counter China, and force them to decouple from China," Ma Jihua, a veteran industry analyst, told the Global Times on Tuesday.
Industry giants, including South Korean firms, have been relocating their production capacity for memory chips to China in recent years, with China being the largest electronic products maker and consumer in the world.
Yole data showed that production of NAND chips in China has grown to more than 23 percent of the worldwide total this year from under 14 percent in 2019, while production in the US decreased from 2.3 percent to 1.6 percent over the same period.
To move current memory chip production lines from China will require much time and money, Li said.
If the reported move takes place, the global chip industry will be further disrupted and shortages may occur in more sectors, Ma warned.
But the crackdown will likely continue, Li said, warning of further possible US moves on talent and investment curbs in the semiconductor industry./Global Times
