Memory prices surge by 190,000, making it difficult for small and medium-sized enterprises to secure supplies, while Yangtze Memory is entering a golden period of resurgence

Large corporations leverage their strong capabilities to secure major supply channels. Apple has signed long-term agreements with Samsung and SK Hynix to ensure stable storage supply for mobile phones. NVIDIA accounts for about 70% of high-bandwidth memory capacity, used for artificial intelligence computing. Cloud service providers like Google and Amazon have large reserves of enterprise-grade dynamic random-access memory and solid-state drives. Automotive companies such as Tesla have also joined the rush, increasing investments in automotive-grade chips. These top buyers, roughly around one hundred companies, essentially control high-quality sources.

The remaining chips are distributed to a wide range of small and medium-sized enterprises. Overseas PC manufacturers Dell and HP, after depleting their overseas inventories, turned to domestic suppliers. Products from Yangtze Memory Technologies (YMTC) and Changxin Memory Technologies (CXMT) have become new options. Domestic mobile phone companies Huawei, Xiaomi, OPPO, and Transsion are also locking in capacity from these two companies. If YMTC and CXMT can effectively meet the demands of small and medium-sized enterprises, domestically produced storage chips will have a broader market space.

YMTC was established in July 2016, headquartered in Wuhan, Hubei Province, focusing on the design, production, and packaging of 3D NAND flash memory. The company received strong support from the start, with major shareholders including Tsinghua Unigroup, the National Integrated Circuit Industry Investment Fund, Hubei Science and Technology Investment Group, and the National Development Investment Fund, providing solid financial backing. By integrating Wuhan Xinxin, the company upgraded manufacturing processes to 65 nanometers. Later, it independently developed a bonding architecture that separates memory cells from peripheral circuits, connecting them through bonding technology. This approach significantly improved chip density and performance, laying the foundation for surpassing international competitors.

Progress has also been made in domestic equipment. Shanghai Micro Electronics continuously iterates lithography machines; Semiconductor Manufacturing International Corporation (SMIC) launched a 5-nanometer etching machine suitable for 128-layer processes; TuoJing Technology and North Huachuang have advanced in thin-film deposition equipment; and China Science and Technology Innovation has achieved coverage with 28-nanometer ion implantation machines. In 2025, YMTC announced the launch of its first fully domestically produced trial production line, covering the entire process from lithography to etching and packaging inspection, eliminating reliance on imports. By March 2026, this line achieved a major breakthrough and entered pre-production. All 28 core processes at the Wuhan Phase III plant use domestically made tools. After repeated optimization, the chip yield rate increased from about 30% initially to over 85%, approaching international mainstream levels, with etching stability reaching 99.8%. The proportion of domestically produced equipment rose from less than 16% before sanctions in 2022 to 45%, significantly reducing dependence.

This production line was launched amid a storage chip supply shortage. Previously, some companies hesitated to adopt domestic equipment, but now, with market demand outstripping supply, many users are proactively choosing domestic solutions. Rising prices have brought higher profits, which in turn support technological iteration and capacity expansion. The market process also exposes issues, driving continuous equipment improvements.

While international giants focus on serving high-end clients like Apple, NVIDIA, Tesla, and Google, YMTC and CXMT are filling the gaps in the mid- and low-end markets. They can stabilize these segments and gradually move toward higher-end markets, while also preventing small and medium-sized enterprises from collapsing due to chip shortages and avoiding future supply overcapacity risks.

The high prices of storage chips put pressure on end products and ordinary consumers. However, for companies like YMTC and CXMT, this presents a rare growth opportunity. Seizing this chance, they can elevate their capacity, technology, and market share to new heights.