Backed by billions of dollars in government funding, China in 2014 launched a major initiative to advance its domestic semiconductor, IC-packaging and other electronic sectors. So far, though, the results are mixed.

China is making progress in IC-packaging, but the nation’s efforts to advance its domestic logic and memory sectors are still a work in progress. In fact, China has yet to achieve its goal of closing the technology and trade gap with foreign chipmakers.

The government isn’t throwing in the towel, however. On the contrary, it continues to invest in the semiconductor sector, and now it appears to be putting its emphasis on one area in particular—memory.

The nation’s memory efforts are being expanded on two fronts. On one front, three multinational companies—Intel, Samsung and SK Hynix—are expanding their memory production in fabs within China. On a second front, China hopes to get its own domestic memory sector off the ground, and for good reason. It must obtain or import the vast majority of its chips from foreign suppliers, creating an enormous trade gap in the arena.

To help jumpstart its domestic memory efforts, China has attempted to acquire multinational memory makers or to form technology alliances with them. So far, most of the multinationals have balked, citing national security and intellectual-property concerns, or their governments have stepped in to stop the deal. The Committee on Foreign Investment in the United States (CFIUS) has been active in blocking Chinese investments, according to numerous industry sources.

While China continues to look for partnerships, several domestic memory makers have emerged. Here’s the latest activity in China:

• In December, China unveiled a $24 billion memory project in Wuhan, the capital of the Hubei province in central China. Yangtze River Storage Technology (YRST), which is spearheading the project, hopes to build 3D NAND fabs. YRST itself is backed by China’s Tsinghua Unigroup, a state-run company.

• Tsinghua Unigroup has a separate DRAM and 3D NAND fab project in Nanjing. The total investment is over $30 billion in that project, making its total investment in the memory segment at a whopping $54 billion, at least for now. In addition, Tsinghua Unigroup also recently acquired a memory design house in China.

• China’s Jinhua Integrated Circuit Co. (JHICC) recently broke ground on a new DRAM fab. JHICC obtained its DRAM technology from Taiwan’s UMC.

• GigaDevice, a Chinese flash design house, is trying to get a memory fab venture off the ground.

Not all projects will become a reality, though. Sino King Technology, which is led by the former chief executive of Elpida, has suspended its efforts to start a memory company in China.

All told, in memory, China is starting from nearly scratch. Consequently, it won’t be easy to get a domestic memory industry off the ground. “It won’t happen in the short term,” said Risto Puhakka, president of VLSI Research. “China has the capital, but they lack the skill level and IP.”

Still, China is moving full speed ahead in both memory and logic. In fact, semiconductor technology and manufacturing are playing a big role in one of the nation’s major initiatives, dubbed “Made in China 2025.” Launched in 2015, the goal of this effort is to upgrade and increase the domestic content of components in key industries.

“China is becoming a leading consumer of electronics, but they’re not yet producing much of the semiconductor components for those electronics systems,” said David Fried, chief technology officer at Coventor. “It just makes sense for them to bring that semiconductor production inside to satisfy consumer demand. So they’re going to invest a lot in logic and memory to bring up advanced technology nodes. And they are going to try to do it fast.”

By: DocMemory
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