Expert: Yangtze Memory Technologies is not yet able to shake up the global market

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Gou Jiazhang, general manager of Silicon Motion, a Nand Flash control IC manufacturer, pointed out that the price of Nand Flash, which began to fall in the second half of 2018, has already fallen sharply in the first quarter of 2019, and the price drop has converged in the second quarter. In addition, the emergence of new applications has made the overall market situation better than before. However, the current price continues to remain low, and under the influence of many external factors, the overall situation in the second half of 2019 remains conservative.

Gou Jiazhang said that the overall semiconductor market did perform poorly in 2019, due to the global economic downturn and the impact of the US-China trade war. Among them, the performance of mobile phones and data centers in the Chinese market was not ideal, especially in the data center sector, only Toutiao performed better, and BAT (Baidu, Alibaba, Tencent) all declined severely. As for the North American market, the performance of data centers will be better than that of Chinese manufacturers.

In addition to the fact that market demand is still relatively conservative, there is no effective way to control the supply. Gou Jiazhang said that although most memory manufacturers have announced a reduction in capital expenditures before. However, the impact of reducing capital expenditures in this way will not be significant in 2019. Therefore, in the case that memory cannot be effectively controlled in terms of production capacity regulation, coupled with the fact that clients have a large amount of inventory to digest, and the newly launched 5G applications have limited initial benefits, although the price decline continues in the short term, the situation is more restrained than before. However, it is almost impossible to have a chance of price rebound in 2019.

Gou Jiazhang further analyzed that the current control capacity of Nand Flash is mostly in the more mature 64-layer stacked products, while the 96-layer stacked products have not been reduced. This is to cope with the emergence of new applications, which makes the OEM market relatively stable, while the consumer market price is more chaotic. As for the 64-layer stacked products launched by China Yangtze Memory, although the planned production capacity is 100,000 pieces, the current production capacity is less than 10,000 pieces. Therefore, although it is difficult to have a shocking impact on the global market, it will indeed have some driving effect on some consumer products in China. As for the subsequent situation, it remains to be observed.

The official website of the Wuhan Municipal People's Government of China announced the implementation of the work report for the first quarter of this year. Among them, Wuhan East Lake New Technology Development Zone has made certain progress in memory bases, chip industry clusters and other aspects.

The Wuhan Municipal Government Inspection Office revealed that Wuhan Mayor Zhou Xianwang led a team to Beijing to seek support from the Ministry of Industry and Information Technology, the National Integrated Circuit Fund, and Tsinghua Unigroup. At present, the first phase of the Yangtze Memory Base, with NAND Flash as its main product, has achieved mass production, with a monthly production capacity of 5,000 pieces and an office staff of 3,000 people.

In addition, KLA-Tencent Semiconductor, a company supporting the memory base, officially opened for business in the Future Science Park in March; Synopsys R&D Industrial Park has entered the interior decoration stage. In the first quarter, the Dinglong Holdings Semiconductor and Display Core Materials R&D and Manufacturing Base project with a total investment of 3 billion yuan was introduced; the HiSilicon Optoelectronics Phase II project is ready to start construction; and the MediaTek Phase II project is in the process of going through the commencement procedures.

It is reported that Yangtze Memory Technologies Co., Ltd. started with 64-layer stacked 3D NAND Flash and then advanced to 128 layers, with a target production capacity of 300,000 pieces. However, Chinese officials revealed that the actual output is only about 5,000 pieces per month, which is still far from the target of 300,000 pieces. Therefore, the impact on market supply is not significant at this stage. In addition to quality issues, most of the products are currently sold to the Chinese white-label market.