YMTC plans two more factories, doubling China NAND chip output capacity

YMTC’s expansion is a direct test of U.S. export controls and a sign Beijing is still pushing hard to build a homegrown memory-chip base. The Wuhan producer plans two more factories on top of a third plant due to be completed this year, a buildout that would more than double its NAND flash capacity if all three new sites reach full scale.

The three new plants would each be designed for 100,000 wafers a month when fully operational. YMTC already runs two fabs with a combined 200,000 wafers a month, so the added capacity would give China a much larger domestic supply of a chip used in smartphones, computers and other electronics. In a market that is cyclical and heavily influenced by AI demand, the extra output could affect pricing and give Chinese device makers more room to source at home.

The third plant, also in Wuhan, is expected to start operations late this year and reach 50,000 wafers a month by 2027. Its building has already been completed, and equipment installation is underway. More than half of the tools for the site have reportedly been sourced from domestic companies, including equipment used for vertical stacking of chip layers. That points to a supply chain that is increasingly being rebuilt inside China rather than relying on foreign vendors.

YMTC has intensified cooperation with local suppliers such as Advanced Micro-Fabrication Equipment since the U.S. Commerce Department added the company to the Entity List in December 2022. Founded in 2016 in Wuhan with backing from local government and state-backed chip investment funds, YMTC has kept climbing despite tighter restrictions. A UBS report cited in the coverage put YMTC at 11.8% of the global NAND flash market last year, roughly on par with Sandisk and behind Samsung Electronics, SK Hynix, Kioxia and Micron. Analysts also view its Xtacking 4.0 architecture as comparable to leading products from Samsung.

The timing underscores how political semiconductor supply chains have become. On April 3, a bipartisan group of U.S. politicians proposed further restrictions on chipmaking equipment exports to China, adding pressure just as YMTC expands. The company’s plan suggests Beijing is willing to absorb that pressure rather than slow the buildout, raising the stakes for global memory-chip supply, equipment makers and investors watching whether China can keep narrowing the gap.