Chinese chipmaker Yangtze Memory Technologies Corp. (YMTC) has set a goal of overtaking Samsung Electronics and SK hynix to become the world's largest producer of NAND flash memory next year. The company plans to channel funds raised through an initial public offering into expanding production facilities and research and development to claim the global top spot.
The Financial Times reported on the 25th, citing multiple sources, that YMTC recently told investors during IPO preparations that it plans to become the world's No. 1 NAND player by the end of next year. According to market research firm TrendForce, YMTC ranked third in the global NAND market in the first quarter of this year, behind Samsung Electronics and SK hynix. It is the largest Chinese producer.
NAND is a type of semiconductor that retains data even when power is cut off, and it is widely used in smartphones, tablet PCs and data center storage devices. While U.S. semiconductor restrictions on China have focused on the most advanced lithography equipment and the high-performance chips produced with it, Chinese manufacturers have rapidly narrowed the technology gap by relying on stacked structures and process optimization, analysts said. They have also expanded market share on the strength of Chinese government subsidies and a solid electronics supply chain.
YMTC has accelerated its listing process after ChangXin Memory Technologies (CXMT), which focuses on DRAM, successfully debuted on the Chinese stock market. Last week it filed an IPO application with the Shanghai Stock Exchange to raise 33 billion yuan (about 6.9 trillion won, or $4.7 billion). The proceeds will mainly go toward upgrading production facilities and developing technology.
A specific listing date has not been set. Some in the market expect YMTC's market capitalization to exceed 1 trillion yuan if its shares rise after the listing. But a banker involved in the listing process said the offering price could be set conservatively in line with regulatory guidance, adding that the company's valuation at the IPO stage is being discussed in the range of 200 billion to 300 billion yuan.
Earnings are also growing sharply. YMTC posted first-quarter revenue of 47 billion yuan and net profit of 33 billion yuan, more than double its full-year results from last year.
Still, concerns have been raised that aggressive capacity expansion by Chinese chipmakers could create oversupply and drag down memory prices. With memory chip stocks having rallied on the artificial intelligence investment boom, capacity additions by YMTC and CXMT could upend global supply and demand, analysts said. Joanna Yang, a manager at asset manager Ninety One, said investors' main concern is how capacity expansion by Chinese companies will affect memory supply and demand. "Memory is a product that trades globally and whose prices are set in the global market," she said.
