How the domestic memory chip industry can emerge from its darkest moment

Latest update time：2022-12-19 12:23

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At the beginning of the National Day in 2022, mainland China's memory chip industry, which is still in its infancy, was hit by the U.S. government's precise blockade.

First, the U.S. Department of Commerce (BIS) prohibits U.S. suppliers from providing production equipment to manufacturers of DRAM and 3D NAND memory chips in mainland China. U.S. suppliers are subject to control on the equipment they provide to DRAM and 3D NAND memory chip manufacturers in mainland China for 18nm and below DRAM chips and 128-layer and above 3D NAND flash memory chips. The export of such chip manufacturing equipment must undergo strict review and obtain a license before it can be exported. Second, the U.S. Department of Commerce issued an "unverified list" with 31 Chinese companies on the list, including Yangtze Memory.

Although in terms of procedures, shipments can be released as long as a license is obtained, the U.S. Department of Commerce also emphasized that when it comes to Chinese mainland semiconductor companies purchasing equipment from U.S. suppliers, the U.S. Department of Commerce will adopt a "presumption of prohibition" on applications. "denial" principle, that is, unless there is evidence to prove that the transaction will not have an adverse impact on the national security and foreign policy of the United States, otherwise the license will be refused. This move will undoubtedly greatly increase the future procurement of equipment by Yangtze Storage and Hefei Changxin from the United States. Difficulty of Obtaining a Permit. At the same time, it hinders the normal technical exchanges between Chinese memory chip companies and the global industry. It has had a serious impact on both the supply side and the sales side, and has undoubtedly pushed the Chinese storage industry into the "darkest moment."

The United States abuses its technological hegemony and restricts China's memory chip technology from continuing to iterate. It seems to have given it a breath, but in fact it will strangle China's nascent storage industry in the cradle. Unlike other logic products that have a market with mature processes, storage is an industry that is extremely sensitive to scale and technology iteration cycles. Technology and scale determine costs. Without a cost advantage, it means giving up the market to competition. opponent. If this continues, China's storage industry may suffer the same fate as Japan's DRAM industry in the future: complete extinction.

Whose cheese has been touched by the storage of China in its infancy?

Memory chips are not only widely used in smartphones, tablets, PCs and other products, but also as society enters the era of cloud computing and big data, memory chips have become a strategic emerging industry that is related to the success or failure of the next generation of information technology. Memory chips are related to the country's information security, the security of the information technology industry chain, and even the development of higher-level artificial intelligence in the future. In recent years, information storage security incidents have occurred frequently. Once information storage security is threatened, it will endanger the development of all industries such as the party, government, military, petroleum, chemical industry, nuclear energy, and finance. It is an important part of the overall national security strategy. The demand based on independent control is the fundamental reason for the policy push.

At present, mainland China's accumulation of relevant technologies is weak, its self-sufficiency capacity is basically zero, and it has completely lost its ability to control. In the "National Integrated Circuit Industry Development and Promotion Outline" released in 2014, it was specifically pointed out that key chip industries such as new storage should be developed to seize the commanding heights of future development. Driven by the wave of domestic substitution of key core technologies, mainland China has risen to the challenge and launched a strategic layout for memory chips, striving to make a difference in this high-end industry.

There are three considerations for mainland China to enter the memory chip industry. First, the market size is large enough. Second, mainland China has no say in market prices. Third, it is information security strategy. At the national level, how to enter the industry, the intensity and scale of entry require a clear industrial positioning.

2016 is the first year for the development of the memory chip industry in mainland China. From February to July, the three major memory chip companies in mainland China, Jinhua Integrated, Hefei Changxin and Yangtze Memory, were established one after another. 2019 is the first year of the industrialization of memory chips in mainland China. Yangtze Memory has achieved mass production of 32-layer 3D NAND flash memory chips and announced the production of 64-layer 256Gb TLC 3D NAND flash memory chips; Hefei Changxin announced the first 8Gb DDR4 product manufactured with the 19nm process .

It is precisely because of the efforts of Yangtze Memory and Hefei Changxin that the advent of domestic memory and domestic solid-state drives has broken the monopoly of overseas giant companies, allowing consumers to enjoy more benefits.

Previous reports stated that Apple is considering using Yangtze Memory's 3D NAND flash memory chips in the iPhone 14 mobile phone, which proves the strength of mainland China's local companies in the industrialization of memory chips.

After the news about Apple’s selection of Yangtze Memory’s 3D NAND flash memory chips came out, many U.S. senators believed that purchasing 3D NAND flash memory chips from Yangtze Memory would bring major privacy security vulnerabilities to Apple’s global digital supply chain and demanded that this be done. Transactions undergo national security reviews to prevent them from posing a threat to the U.S. economy and national security. Due to increasingly strict controls and the dual control of domestic public opinion in the United States, Apple has to change its procurement plans, and even the supply and procurement plans of various domestic companies in the United States must make changes. This kind of change must be what overseas memory chip giants want to see. After all, Yangtze Storage, as a rising star, continues to gain a foothold in the fierce market competition and is bound to impact the cheese of overseas giants.

How does mainland China’s memory chip industry emerge from its darkest moment?

Mainland China is a major consumer of memory chips. my country imports more than $300 billion worth of chips each year, of which memory chips account for more than 30%, consuming nearly 50% of the world's memory production capacity. In the era without Yangtze Memory and Hefei Changxin, Micron, KIOXIA, Samsung and SK Hynix completely controlled the pricing power of memory chips, and arbitrary price increases were common.

The U.S. government has raised Apple's purchase of Yangtze Memory's 3D NAND flash memory chips to a national security issue. If Yangtze Memory and Hefei Changxin really stagnate or even collapse, how can my country's information security be guaranteed? How to ensure that my country's supply chain is stable and will not be "stuck" at any time? How to ensure the sustainable development of the future industrial chain?

In 1986, Japanese manufacturers accounted for more than 50% of the global semiconductor market and 80% of the world DRAM market. However, due to the failure to grasp the consumer-grade PC era, coupled with the restrictions imposed by the United States through the Plaza Accord and the Japan-US Semiconductor Agreement, and the strong impact of South Korea, the profitability of the Japanese semiconductor industry has declined, and its market share has declined rapidly, heading towards the beginning of decline. Today Japanese semiconductor manufacturers only account for about 10% of the global semiconductor market.

At present, under the unscrupulous actions of the United States, the good situation of the development of the integrated circuit industry in mainland China has only gotten worse. The memory chip industry in mainland China and even the chip industry in mainland China have already faced their darkest moment. How can we learn from the experience and lessons of others and not repeat the same mistakes?

Facing the complex external environment, we must not relax our vigilance. We must abandon all illusions, take action, and continue to promote cooperation across global supply chains with a more open attitude. At the same time, companies themselves continue to work hard, and the government must guide the upstream and downstream of the industry chain to strengthen linkage to protect the fundamentals of mainland China's chip industry chain.

To this end, the national strategy of technological innovation, independent research and development, and independent production must be implemented. In this regard, we must continue to insist on industrial upgrading and not give up development because of restrictions; we must continue to increase investment in research and development, overcome "stuck neck" technologies, and find an independent and self-reliant development path as soon as possible.

At the strategic level , central coordination is required to integrate resources from all parties. First, vigorously recruit high-end technical talents, and through technology introduction + independent development, on the basis of introducing and absorbing existing mature technologies, integrate innovation to achieve independent development, and gradually catch up with advanced technology until surpassing; secondly, actively deploy new memory technology research and development, Funds and talent should be invested in research on several current new technologies including RRAM, MRAM, PRAM, etc., rather than just discussing which technology may win in the future. As long as energy is produced, there is always a place for it.

In terms of policy , the government will guide and actively promote the localization strategy, increase the localization rate of complete machines and chips in the information industry, and truly achieve safety and controllability. Through tax regulation, investment and financing in the memory industry will be guided and encouraged to build a good industrial environment.

At the financial level , sustained, long-term, and substantial investment must be maintained. If our country is positioned to surpass the first group and play the role of market leader, it needs to achieve a market share of about 30%. Considering the licensing and absorption of existing technologies, the upgrading of production technologies, and the research and development of new technologies, the total investment should be 1 trillion yuan or more, and this investment is continuous and long-term.

In terms of market , the domestic market is very huge. The local market consumes at least nearly 100 billion US dollars of memory chips every year. Driven by such a huge market, we can better leverage our upstream and downstream advantages and change the current passive situation caused by foreign monopoly on memory chips.

Don’t think that the United States will give us a breath to develop mature technology. At this critical moment for the survival of China’s storage, we must abandon illusions, unite sincerely, calm down, strengthen independent research and development, and find a path for China’s independent memory chip development.

No winter is insurmountable

In fact, mainland China's semiconductor industry has been developing tenaciously in the harsh winter with "shackles". From Batumi in 1949 to the Wassenaar Treaty in 1996, the United States and its allies have been preventing mainland China from obtaining semiconductor integration from overseas. Circuit technology and advanced products, but over the past 70 years, mainland China's semiconductor integrated circuit companies and people from all walks of life have never been deterred by this. They are still working hard and tenaciously to let China's semiconductor integrated circuit industry occupy a place in the world.

We are still like this now, knowing shame and then being brave. I believe that in the future, mainland China's chip industry will move forward and continue to pursue the peak of chips.

Walking in the cold wind on the streets of a small town in Jiangnan, I suddenly remembered the title of Southern Weekend's 2009 New Year's message, "No winter is insurmountable." Because of the cold, we face the sun more; because of threats, we cherish it more.

Come on Yangtze Memory Technologies! Come on Hefei Changxin! Come on China's storage industry!

Please firmly believe that no winter is insurmountable!