YMTC Profile

Yangtze River Storage Technology Holdings Co., Ltd. (YMTC)

YMTC scores as an ELEVATED RISK in the February 2024 Chip Risk Monitor for investment, supply, research, and industrial policy ties to the Chinese government and military bureaucracies.

YMTC has been placed on the Department of Commerce’s Entity List and Department of Defense Section 889 List.

Background

Yangtze River Storage Technology Holdings Co., Ltd. (YMTC) is a critical node within the Chinese Communist Party’s (CCP’s) science and technology strategy. YMTC is owned by and collaborates with a network of CCP- and State-backed entities focused on developing China’s semiconductor capacity, also with ties to China’s military and military-civil fusion program.

YMTC provides advanced storage products and solutions for global customers that span mobile communications, computers, data centers, and consumer electronics use cases. YMTC’s role within China’s broader fabless semiconductor ecosystem is to become a world-class supplier of 3D NAND Flash memory.

Objective Risk

YMTC’s largest shareholders are affiliated to the Chinese State, Party, and military bureaucracies. YMTC also partners with Chinese government research players tied to the military-civil fusion program and has supply relationships with companies that have been identified by the US government as supporting China’s military modernization.

Ownership Risks

YMTC’s ownership structure has changed repeatedly since its founding in 2016 but one thing has remained constant: Its shareholders have remained State-owned companies with ties to the PRC’s tech, industrial, and military-civil fusion projects. Based on most recent reporting, YMTC’s current three largest shareholders are all State-owned players: Hubei Changsheng Development Co., Ltd; Hubei Ziguang Guoqi Technology Holdings Co., Ltd and the National Integrated Circuit Industry Investment Fund Co., Ltd. The latter, which increased its investment in 2023, is a Chinese government-guided fund fueled by state-tied capital intended to provide capital for the domestic development of China’s semiconductor industry. Hubei Changsheng is backed by the holding group of Wuhan Optics Valley, a PRC military civil fusion-tied technology project in which YMTC is based. And Hubei Ziguang, formerly a Tsinghua Unigroup subsidiary, is now majority owned by the Hubei Science and Technology Investment Group.

Research and Supply Partnership Risks

YMTC and the Chinese Academy of Sciences’s (CAS’s) Institute of Microelectronics partner in government-backed research to support China’s development of indigenous, cutting-edge semiconductor capabilities. The partnership between YMTC and the Chinese Academy of Sciences’s (CAS’s) Institute of Microelectronics is demonstrative of the hand-in-hand relationship between State guided development and YMTC’s prospects. For example, in 2020, the Institute of Microelectronics and YMTC successfully developed 128-layer 3D NAND flash memory products, thanks to support from the Chinese government’s National Science and Technology Major Project. A press release on the Chinese Academy of Sciences website described this as “break[ing] through the bottleneck of the traditional memory process…mark[ing] that China has mastered core memory technology with independent intellectual property rights and reached the level of international first-class memory design and manufacturing.” In 2021, that achievement won the “Integrated Circuit Innovation Award” of the China Integrated Circuit Innovation Alliance in China.

YMTC has also formed supply agreements with both Huawei and Goke Microelectronics, both of which are on the US Commerce Department’s Bureau of Industry and Security’s Entity List.

Industry Zone Risk

YMTC and the Chinese Academy of Sciences’s (CAS’s) Institute of Microelectronics partner in government-backed research to support China’s development of indigenous, cutting-edge semiconductor capabilities. The partnership between YMTC and the Chinese Academy of Sciences’s (CAS’s) Institute of Microelectronics is demonstrative of the hand-in-hand relationship between State guided development and YMTC’s prospects. For example, in 2020, the Institute of Microelectronics and YMTC successfully developed 128-layer 3D NAND flash memory products, thanks to support from the Chinese government’s National Science and Technology Major Project. A press release on the Chinese Academy of Sciences website described this as “break[ing] through the bottleneck of the traditional memory process…mark[ing] that China has mastered core memory technology with independent intellectual property rights and reached the level of international first-class memory design and manufacturing.” In 2021, that achievement won the “Integrated Circuit Innovation Award” of the China Integrated Circuit Innovation Alliance in China.

YMTC has also formed supply agreements with both Huawei and Goke Microelectronics, both of which are on the US Commerce Department’s Bureau of Industry and Security’s Entity List.