China-owned semiconductor giant Tsinghua Unigroup, which already manufactures flash memory, is about to try its luck at making DRAM – a much more complicated endeavour.
The Middle Kingdom wants a reliable domestic supply of DRAM, but its latest efforts were thwarted at the end of 2018 when the US indicted state-owned chipmaker Fujian Jinhua Integrated Circuit Company (JHICC) on industrial espionage charges, and banned the company from importing semiconductor equipment and materials from the US. This effectively stopped JHICC from advancing its DRAM programme.
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Etching DRAM wafers is a highly complex and expensive task: in recent years, memory suppliers have consolidated into an exclusive club, with Samsung, SK Hynix and Micron providing for around 95 per cent of the world's DRAM needs.
Tsinghua once attempted to infiltrate this list by buying Micron for $23bn, but is about to enter the highly volatile market on its own, in what is seen as a response to the ongoing trade conflict with the US.
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Since 2018, Tsinghua Unigroup HAS BEEN majority-owned by the government of Shenzhen, China's industrial capital. It acquired Chinese startup RDA Microelectronics for $907m in 2014, and French chip designer Linxens for €2.2bn in 2018. It also owns Spreadtrum Communications, a homegrown mobile chip supplier that hopes to rival MediaTek and Qualcomm, and a chunk of Portland-based Lattice Semiconductor.
Last year, Tsinghua president Zhao Weiguo called for peaceful coexistence with American firms. "I hope multinational chip makers can leave a bite for Chinese companies," he said.
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According to DRAMeXchange, Tsinghua's new DRAM unit will be led by Charles Kao as CEO, and Diao Shijing, former director of the Electronic Information Department of the Ministry of Industry and Information Technology, as chair.
Kao has been called "the godfather" of Taiwan's DRAM industry. He is the chairman of Inotera Memories, acting chairman of Yangtze River Memory Technology Corporation and former president of Nanya – all three make DRAM products.
DRAMeXchange claimed Tsinghua has experience building production facilities as it employs the same teams that worked on fabs for Yangtze Memory. Tsinghua is already building a DRAM plant in Nanjing and is negotiating with the government of Chongqing, where it hopes to open a second facility.
Tsinghua said it would enter the DRAM market once before, in 2014, but instead decided to focus on NAND manufacturing.
While the trade war between the US and China has no doubt accelerated these efforts, China's drive for DRAM independence has been predicted for a while. DRAM manufacturing is part of a larger "Made in China 2025" project that includes the establishment of a domestic semiconductor industry that could supply at least 70 per cent of the country's needs.
Semiconductor sales by Chinese manufacturers are said to have reached ¥653.2bn in 2018 – that's about $97.3bn, or around 20 per cent of global semiconductor revenue for the year ($476.7bn). ®