Stung by Trump trade ban, China doubles down on DRAM market

China’s Tsinghua Unigroup today said it is entering the DRAM business – and Foxconn looks set to follow suit, according to analysts.

This is against a backdrop of continuing US-China trade tensions, including restrictions imposed by the US Department of Justice on Huawei that bar US firms trading with the Chinese tech giant.

According to Nikkei Asian Review, China aims to produce “70% of its own chips by 2025. The current figure, thought to be between 10% to 30%, leaves Chinese companies reliant on foreign chipmakers”.

So how are they doing so far?

Yangtze Memory Technology, a Tsinghua subsidiary, is developing 3D NAND with 128-layers in mind.

And the market research firm DRAMeXChange today noted China’s Innotron Memory attended the GSA Memory+Conference in May and is expected to mass produce 8Gb DRAM product by this year-end. However, for self-sufficiency, China needs more than a single Innotron fab, DRAMeXChange said.

These are the bright spots in China’s bid to build national chip champions. Otherwise, the road to “Made in China in 2025” has been rocky.

All is fair in trade and war

In September 2017, in an analysis of three emerging Chinese memory and NAND makers, I wrote: “We wonder if domestic American DRAM and NAND suppliers might start international fair trade spats if these Chinese suppliers entered the US market.”

It didn’t take long. In December 2017, Micron, the US’s only big memory maker, filed suit against JHICC, a Chinese maker of DRAM for specialist consumer markets, alleging theft of trade secrets and intellectual property.

The US Government took up cudgels on behalf of Micron in September 2018, banning US exports of chipmaking equipment to JHICC. In November the U.S Department of Justice filed an indictment, alleging theft of trade secrets by JHICC, its Taiwanese partner United Microelectronics Corp, and sundry individuals.

This spooked UMC, a major contract chip maker for US vendors, which ended its co-operation with JHICC in January 2019.

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