Impact on entire SSD market: US sanctions hit YMTC

Chinese NAND Flash maker YMTC lands on US Entity List.

The US Bureau of Industry and Security (BIS) puts 36 other companies on the so-called entity list, including the Chinese NAND flash manufacturer Yangtze Memory Technologies Co., Ltd. (YMTC). As a result, US companies and partners may only sell products to the companies concerned under strict licensing conditions.

In the case of YMTC, this could affect the price development of SSDs worldwide, predicts the Trendforce market research team. YMTC is the Chinese flagship project when it comes to the production of memory components. In terms of storage density and performance, the company can keep up with industry giants such as Samsung and Micron, most recently they are said to have developed 232-layer NAND flash components.

However, if YMTC is no longer allowed to buy lithography systems and development tools from the West, expanding the production capacity and further development of NAND flash is practically impossible. Trendforce previously estimated that YMTC will expand production capacity by 60 percent in 2023 – now the market researchers are assuming a 7 percent drop in delivery volume.

With the loss of a competitor, other memory manufacturers can sell their devices in greater numbers and thus get the prevailing oversupply under control. Overproduction in recent months has kept SSD prices low. The price reductions should now stabilize by the second quarter of 2023 and prices should finally rise again in the third quarter.

For YMTC, the sanctions couldn’t have come at a worse time. Recently, Apple considered the Chinese memory devices for bulk orders but halted negotiations due to looming trade restrictions.

In a statement, the BIS merely writes that the promotion of YMTC to the entity list, like that of Shanghai Micro Electronics Equipment, is not related to end-use control, unlike other companies. According to the Reuters news agency, the US government fears that YMTC will pass on US technology to the two blacklisted companies Huawei and Hikvision. Hikvision manufactures IoT devices, including IP cameras.

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