TOKYO – Let’s face it: Tsinghua Unigroup’s recently revealed plan to build a $30 billion memory chip in Nanjing was unexpected – even by many China watchers. The move is a head-scratcher, considering the uncertainty of China’s memory production even by such a known entity as XMC in Wuhan.
Tsinghua Unigroup’s Nanjing announcement, however, speaks volumes for China’s determination to rule the global memory industry.
China is forging ahead despite a number of challenges. Among the biggest are a shortage of experienced memory chip engineers, a dearth of management expertise and growing scrutiny from the Committee on Foreign Investment in the United States (CFIUS).
In recent months, China’s proposed foreign investment deals were either blocked by or abandoned due to pressure from CIFUS. This sort of pushback makes it almost impossible for Chinese entities to buy foreign memory chip companies lock, stock and barrel.
Chinese media company Sina recently quoted Zhao Weiguo, chief executive of Tsinghua Unigroup, saying at a ceremony earlier this month:
In 2016 we started the construction of the memory base in Wuhan. This year we will build another two semiconductor manufacturing sites in Chengdu and Nanjing. The total investment of the three projects has exceeded $70 billion. Tsinghua Unigroup shoulders the future of IC Industry.
Tsinghua Unigroup’s stepped-up plans are palatable. Critics, however, point out that building a fab is one thing, but operating it is the hard part — especially when it comes to producing something as complex as 3D NAND flash.
Takashi Yunogami, a semiconductor engineer-turned consultant and an author of several books on the Japanese semiconductor industry, was a leading skeptic on the 3D NAND flash fab in Wuhan. However, he recently reversed his position. He told us this week that he has seen recently enough evidence from suppliers of materials and semiconductor manufacturing equipment to China.
Battles over people, equipment and money
Unfolding in China today, observed Yunogami, are battles over recruitment of engineering talent and semiconductor equipment (there is a shortage of some equipment designed to make NAND flash). Equally contentious are regional rivalries in China, with each city upping the ante to invite corporations to set up semiconductor fabs.
Before moving to further analysis of China’s memory production a whole, here’s a recap on who’s who among rising local memory chip vendors.
Brian Matas, vice president responsible for market research at IC insights, listed three key players, as of late last year:
- XMC was purchased by Tsinghua Unigroup in July 2016 and set up a holding company called Yangtze River Storage Technology. It has broken ground for a new 300mm 3D NAND flash fab planned to come on-line in late 2017 or early 2018.
- Sino King Technology plans to complete a DRAM fab in Hefei in late 2017.
- Fujian Jin Hua Integrated Circuit Co. intends a DRAM fab that will begin production in the third quarter, 2018.
Sino King is out?
Of these three, EE Times has learned that Sino King is, most likely, no longer in active operation.
The company, founded by Yukio Sakamoto, ex-Elpida CEO, tried to recruit 1,000 chip engineers from Japan, Taiwan and Korea, to remedy – head on – China’s shortage of experienced semiconductor engineers. Although Sino King managed to find 180 Japanese memory engineers willing to relocate, Sakamoto eventually met firm resistance from Chinese investors in Hefei, who refused to pay exorbitant salaries – as much as $887,000 – to senior engineers.
Although Sino King’s salary promises exceeded normal practice in the semiconductor industry, Sakamoto’s action sheds light on China’s ongoing scramble to find the expertise necessary to get their fabs up and running.
Next page: Progress at XMC in Wuhan