Two more DRAM makers based in China, Innotron Memory and Fujian Jin Hua Integrated Circuit, are gearing up for volume production of computer memory in the coming month. Both manufacturers were founded with the help of the Chinese government, their output will initially be consumed locally.

Several years ago, the Chinese government announced plans to invest billions of U.S. dollars in the local semiconductor and adjacent high-tech industries and support appropriate companies directly and indirectly. Since the inception of the so-called Big Fund in 2014, not only over tens of billion were poured into various companies and initiatives (the plan is to invest $150 billion in the coming years), but the first actual results of their operations have started to show up. One of the industries that is developing fast in China is DRAM manufacturing. Earlier this year we reported about Xi'an UniIC Semiconductors, which started to sell its DDR4 chips developed and produced in-house. Apparently, there are at least two more DRAM makers in China ready to start shipments of their memory modules in the second half of 2018 and the first half of 2019: Fujian Jin Hua Integrated Circuit (JHICC) and Innotron Memory.

Fujian Jin Hua Integrated Circuit completed construction of its 300-mm fab in November and started to move in production tools late in 2017. According to a media report, the equipment move-in will be completed by early July and the first phase of the fab will be able to start volume production of DRAM in the third quarter. JHICC reportedly partnered with Taiwan-based UMC to develop its 22 nm DRAM manufacturing technologies, but at this point it is unclear which types of memory the company is gearing up to make. Some previous reports indicated that JHICC was looking at various specialized DRAM products (namely LPDDR4), but the actual plans might be different.

JHICC has already received the first phase of investment totaling $5.65 billion from the local authorities in Fujian, China. It is expected that aggregate investments in the Jin Hua DRAM fab will total $8 billion in the coming years. Manufacturing capacity of the JHICC’s memory fab is unknown, but the facility looks rather big on the picture.

Another China-based company that is getting ready to make DDR4 DRAM devices using its 22 nm fabrication process in the coming months is Innotron Memory (previously known as Hefei ChangXin and Hefei RuiLi). Innotron completed construction of its 300-mm fab in January and then started to move in production equipment. The company intends to start trial production of 8 Gb DRAM chips in late 2018 and then initiate volume production of these ICs sometimes in early 2019.

Innotron’s fab is not going to be very large: its initial capacity will be around 20,000 wafer starts per month in 2019, so in terms of volume it is not going to be a competitor for leading DRAM makers globally. Meanwhile, the firm intends to start building up the second phase of the fab in 2020 to boost its capacity. Furthermore, Innotron plans to complete development of its 17 nm process technology by 2021, the company announced recently.

Considering the facts that Innotron, Jin Hua, and Xi’an UniIC all had to start development of DRAM manufacturing technologies essentially from scratch, and their production capacities are not high, they are not expected to become viable competitors for companies like Micron, Samsung, and SK Hynix in terms of volumes, production efficiencies, or performance any time soon. In the meantime, there are more fabs incoming: in the recent years Tsinghua disclosed plans to invest $24 billion and $30 billion in memory chip production facilities near Wuhan and Nanjing, respectively. Furthermore, leading chip makers (Intel, Samsung, SK Hynix, etc.) already operate 3D NAND and DRAM fabs in China and invest in them to increase their capacities.

In the end, Chinese electronics industry will decrease their reliance on foreign volatile and non-volatile memory chips. Furthermore, it should be noted that it's questionable whether Chinese memory producers have all the patent/technology licenses they need to sell their products outside of China. Or for that matter with transnational semiconductor giants investing billions of U.S. dollars in China, whether they will be able to legally prohibit Chinese companies from building their presence on the foreign markets without facing problems from the Chinese authorities. The good news for the consumer is that with more 3D NAND and DRAM production in various parts of the world pricing of appropriate chips is going to decrease. The bad news is that without proper return-on-investments the progress of technologies may slow down.

Memory production is the first step towards establishment of a full-fledged self-sufficient semiconductor industry in China. Making memory ICs is relatively easy if you have appropriate process technologies, fabs, and clients to buy output. Designing competitive high-performance processors requires access to technology expertise and appropriate technology licenses from various companies. To boost its local SoC/CPU design industry, Tsinghua Unigroup acquired Spreadtrum and RDA in 2013 (which have a license to build mobile SoCs based on select Intel’s x86 cores), then signed an agreement with Intel to co-develop semi-custom server solutions. Meanwhile, Tianjin Haiguang Advanced Technology Investment Co., Ltd (THATIC) formed an x86 joint venture with AMD in 2016.

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Sources: DigiTimes (1, 2), EETimes, SemiEngineering, ElectronicDesign, TrendForce

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  • menting - Wednesday, April 25, 2018 - link

    that's a pretty stupid and bold claim that has no data to back it up. Colluding? If you have any proof of that, you can make a pretty penny by being a whistleblower. With these DRAM prices, don't you think any manufacturer will ramp up as much capacity as they can to get the most while it lasts? Reply
  • StevoLincolnite - Wednesday, April 25, 2018 - link

    They have been found to have been colluding in the past with price-fixing lawsuits.

    Whether they are currently colluding still remains to be seen however.
    Reply
  • Alexvrb - Wednesday, April 25, 2018 - link

    Can't wait for the Chinese to gradually ramp up production and seize control of the market using stolen technology. Reply
  • EBA - Thursday, April 26, 2018 - link

    Were u around in 2015, when dwindling memory prices had Micron widening its losses every quarter? Are u aware the DRAM industry has a long history of capital destruction? If the leading players have been colluding, they must have been doing a lousy job at it.

    If you are so confident about their collusion, go bet ur money on Micron, as the stock is only 5x p/e based on last quarter Eps run rate. Otherwise you are worse than a conspiracy theorist that doesnt have the slightlest piece of evidence to show for.
    Reply
  • FreckledTrout - Wednesday, April 25, 2018 - link

    Is it expected to have an impact on DRAM pricing globally? Reply
  • DanNeely - Wednesday, April 25, 2018 - link

    In the short term no. These're all proof of concept plus level fabs, big enough to let the companies involved get experience at scale; but not big enough to shift the market yet. And with the established dram makers at <20nm, their current 22nm products won't be particularly cost competitive at present anyway. If they can get their next generation up and running fast enough that might start to shift the market. Reply
  • jimjamjamie - Wednesday, April 25, 2018 - link

    So, if the Chinese manage to ramp up NAND as well, does that mean the smartphone manufacturers over there will have as much vertical integration as Samsung? Huawei is already making their own HiSilicon SoCs and then MediaTek is there for the rest.

    Will be interesting to see what happens.
    Reply
  • jjj - Wednesday, April 25, 2018 - link

    Rather empty and misleading and ofc the DDR4 you claim was shipped, are modules made by them that are using Hynix DRAM.
    And at the end, you mix up design and manufacturing.
    Mass market memory manufacturing is not easy at all, those time are long gone. For logic their leading player is SMIC.
    As for design, Hisiliicon is by far the biggest but there are others and their total revenue was over 200 billion CNY last year.
    CPUs are a commodity, there is ARM, there is RISC-V. Besides, memory is the next compute, the 2 need to merge.
    Reply
  • dromoxen - Thursday, April 26, 2018 - link

    This is payback , for the silkworm, the bone china and the heroin.. Karma . Interesting that the big western company's also produce there too. lets see what happens as the years roll by. I noticed some Chinese Motherboards creeping onto the market .. garish odd looking things. Reply
  • South_DL - Tuesday, May 1, 2018 - link

    Tech thieves! from the Chinese Politburo this is not good for the industry! Reply

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