Semiconductor industry: China’s Tsinghua Unigroup files for bankruptcy
The author is an analyst with NH Investment & Securities. He can be reached at email@example.com. – Ed.
Unable to pay its debts, the Chinese Tsinghua Unigroup filed for bankruptcy. Despite this development, the semiconductor boom in China is expected to continue. CXMT and others have started DRAM production, and China’s semiconductor equipment technology level is also increasing.
Tsinghua Unigroup (owner of YMTC) files for bankruptcy
Unable to pay its debts, the Chinese Tsinghua Unigroup has officially filed for bankruptcy. As the parent company of players such as mobile processor company UNISOC and memory game YMTC, Tsinghua Unigroup has long been a leader in China’s semi-con industry. Bankruptcy, however, was not a sudden development. Since 2019, the Chinese government has reduced its support for the company and since 2020, the company has not repaid part of its obligations.
In 2016, Tsinghua Unigroup’s subsidiary YMTC announced it would build three memory factories at 100,000 words per minute each. Today only one fab is currently producing (NAND, 40K wpm). YMTC uses a technology called Xtacking, which integrates memory cells and peripheral circuits on each wafer and attaches two wafers vertically to increase bit density.
China’s semiconductor boom will continue
Despite Tsinghua Unigroup’s bankruptcy filing, the semiconductor boom in China is expected to continue. We note that the company’s bankruptcy is partly due to the reduction in support from the Chinese government. Meanwhile, CXMT and GigaDevice have recently received special attention from the Chinese government. CXMT has a DRAM plant in Hefei producing at a scale of 20,000 words per minute. Although its current process is 19nm, plans are in place to move to a 17nm process in 2H21. Elsewhere, GigaDevice began mass production of 19nm DDR4 DRAM in June 2021.
Chinese semiconductor equipment technology is also improving. SMEE plans to launch exhibition equipment capable of producing semiconductors at the 28nm scale at the end of the year. If the mass production of equipment is successful, we will probably see the replacement of some imports of exhibition equipment. Zhichun Technology shipped wet cleaning equipment applicable to the 28nm process. It also plans to manufacture and launch equipment for the 14nm and 7nm processes by 2022.