Do US Sanctions work? Chinese chipmaker now claims to have made world’s most advanced memory chip

China’s leading memory chip producer, Yangtze Memory Technologies Co (YMTC), is claiming that it has achieved a significant milestone by developing the “world’s most advanced” 3D NAND memory chip, as reported by TechInsights.

The breakthrough, found in a solid-state drive released quietly in July, underscores YMTC’s commitment to advancing technology despite facing sanctions and being placed on the US Commerce Department’s Entity List.

This technological leap follows an earlier analysis by TechInsights of the Kirin 9000S 5G processor in Huawei’s Mate 60 Pro smartphone, which was produced by Chinese foundry Semiconductor Manufacturing International Corp (SMIC).

If YMTC’s claims are true, this begs the question, what do US sanctions even mean and do they have any bite to them? Are they effective at all? For now, it certainly doesn’t look like that.

The success of this home-grown chip, despite stringent US restrictions, highlighted China’s momentum in overcoming trade barriers and establishing a domestic semiconductor supply chain.

The 3D NAND memory chip is a forefront component in memory chip design, crucial for high-performance computing applications such as artificial intelligence and machine learning.

YMTC and 21 other major Chinese players in the chip sector were added to the US Entity List in December 2022 amid escalating trade tensions between the world’s two largest economies.

Despite this, YMTC had initially aimed to challenge memory chip leaders Samsung Electronics, SK Hynix, and Micron Technology with its flagship 232-layer X3-9070 3D NAND flash chip. However, prospects for mass production faced setbacks when US equipment suppliers KLA and Lam Research ceased sales and services to YMTC.

Recent developments in the memory chip market’s downturn and a renewed industry focus on cost-saving measures may have provided YMTC with an opportunity to advance with a more advanced and higher-bit density chip, according to TechInsights.

In April, sources revealed that YMTC intensified efforts to collaborate with Chinese suppliers in manufacturing advanced chips, based on its “Xtacking 3.0” architecture. Progress was reported in a top-secret project named Wudangshan, aiming to use Chinese equipment exclusively.

While YMTC’s achievement is celebrated, analysts caution about choke points in China’s chip manufacturing supply chain, particularly the lack of viable domestic alternatives for chip-making tools, including lithography systems. Dutch company ASML Holding, with a near-monopoly on advanced lithography machines, remains a critical factor in the industry.

TechInsights did not comment on whether YMTC’s memory chips were produced with exclusively Chinese-manufactured tools and components. Meanwhile, a recent Bloomberg report cited unnamed sources stating that SMIC used retooled equipment from ASML, specifically its deep ultraviolet (DUV) lithography systems, to manufacture the advanced processor in Huawei’s Mate 60 Pro smartphone.

The DUV process, though estimated to be more expensive than advanced EUV lithography systems, reflects the complexities and challenges in China’s quest for self-sufficiency in producing advanced chips. Experts caution that, despite recent breakthroughs, Chinese firms still lag behind in developing the necessary lithography systems for significant progress.

(With input from agencies)