Yangtze Memory Technologies Co. (YMTC), China's largest NAND flash maker, has risen to third place globally in NAND shipments, rapidly closing the gap with Samsung Electronics (005930.KS) and SK hynix (000660.KS). Despite U.S. restrictions on exports of advanced chipmaking equipment, the company has lifted its market share on the strength of proprietary stacking technology and vast domestic demand. YMTC is also raising capital through an initial public offering to accelerate capacity expansion and its push into high-margin products.
YMTC held a 16.5% share of global NAND shipments in the second quarter, according to market research firm Counterpoint Research on the 14th. That placed the company third worldwide behind Samsung Electronics and SK hynix, ahead of Japan's Kioxia and U.S.-based Micron. Counting Solidigm, SK hynix's U.S. subsidiary, as a separate company would make YMTC the world's second-largest. The company aims to expand its NAND market share to 20% over the long term.
Revenue is growing just as quickly. YMTC's share of global NAND revenue rose to 14% in the first quarter of this year from 9% a year earlier, a gain of 5 percentage points in 12 months and the fastest increase among major NAND makers. Counterpoint Research projected that YMTC's revenue would grow six times faster than the industry average this year. Still, with a relatively small share of high-priced enterprise products, the company ranked only fifth worldwide by second-quarter revenue.
Behind the rapid growth is Xtacking, YMTC's proprietary chip stacking technology. It fabricates memory cells that store data and the peripheral circuitry that controls them on separate wafers before bonding them together. Because the approach allows NAND layer counts to be increased using existing equipment rather than cutting-edge lithography tools, it is seen as central to the company's response to U.S. export controls.
YMTC is also expanding beyond NAND for smartphones and personal computers into enterprise solid-state drives (SSDs) used in artificial intelligence data centers. With AI adoption driving a surge in demand for server storage, the company plans to lift the share of high-margin products to improve profitability. Counterpoint Research forecast that server-related sales, virtually nonexistent for YMTC in 2024, would account for about 39% of its total revenue by 2028.
The company has moved to secure funding for a large-scale capacity buildout. In August, YMTC filed to list on the STAR Market, the Shanghai bourse's board for technology companies. It plans to raise about 33 billion yuan (7 trillion won, or about $4.6 billion) through the offering and channel the proceeds into production facilities and research and development.
Whether YMTC can win global customers beyond China's domestic market is seen as the key to its future growth. Counterpoint Research said the company's ability to extend its supply chain to customers outside China would be the decisive variable in determining whether it can challenge Samsung Electronics, the world's No. 1 player.