On June 20, Tsinghua Unigroup announced that the second phase of the national memory base project implemented by Yangtze Memory has begun construction in Wuhan.
The project has a planned production capacity of 200,000 wafers per month, and will have a combined capacity of 300,000 wafers per month with the first phase of the project.
The first phase of Yangtze Memory has a planned monthly production capacity of 100,000 wafers and is scheduled to reach full capacity by the end of 2020, by which time Southwest Securities expects Yangtze Memory's global market share to be around 5%.
Here is what Southwest Securities had to say on the matter:
Yangtze Memory is one of the largest investment and most technologically advanced memory fabs in China, accelerating its efforts to catch up with foreign manufacturers in technology breakthroughs and capacity expansion.
The Yangtze Memory National Memory Project started construction in late 2016 with a total investment of US$24 billion.
It is building the 3DNAND flash memory fab in two phases, with the first phase focused on achieving technology breakthroughs and building out a 100,000 wafer per month capacity.
2018 Yangtze Memory breakthrough in 32-layer 3D flash memory technology, with a gap of 3-4 years from abroad.
2019 Yangtze Memory to achieve 64-layer technology mass production, narrowing the gap with foreign countries to 2 years.
In April, Yangtze Memory announced the successful development of its 128-layer QLC 3D flash memory, which has been validated on a number of host manufacturers' SSDs and other terminals.
If mass production of 128 layers is achieved by the end of the year, the technology gap between Yangtze Memory and Samsung, Hynix, Micron, and other foreign vendors will be narrowed to one year, and the first phase of the technological breakthrough has almost been completed.
Yangtze Memory's Phase II project will further increase its global market share by doubling its production capacity.
The global flash memory market is highly concentrated and monopolized by foreign companies, with a monthly production capacity of about 1.3 million pieces by the end of 2019.
The first phase of Yangtze Memory is planned to have a monthly production capacity of 100,000 wafers, which will reach full capacity by the end of 2020, and considering the expansion of foreign manufacturers, Yangtze Memory's global market share will reach about 5% at that time.
The second phase of the project will have an additional capacity of 200,000 wafers, bringing the total capacity of Yangtze Memory to 300,000 wafers upon completion.
Yangtze Memory plans to produce one million wafers per month by 2030, further increasing its global market share.
Only a few local companies, such as Advanced Micro-Fabrication Equipment, have entered TSMC's production line, as it is a long and complicated path for the latest equipment from local manufacturers to be validated at advanced wafer fabs overseas.
Only a few local fabs, such as Advanced Micro-Fabrication Equipment, have entered TSMC's production line. Due to U.S. technology regulations, Chinese advanced fabs, such as Yangtze Memory, and local fabs are strengthening cooperation to achieve win-win situation.
NAURA Technology Group Co Ltd oxidation/annealing equipment market share in Yangtze Memory is 64%/26%, and Advanced Micro-Fabrication Equipment dielectric etching equipment market share increased from 12% in 2017 to 22% in 20Q1.
According to our estimates, the interval between the start of fab construction and equipment bidding is between 6 months and 1 year, and the capacity of the second phase of the project is twice as much as the first phase planned.
