According to reports, people familiar with the matter said today that the second factory of China's long-term memory chip manufacturer "Yangtze Memory" in Wuhan will be put into production as early as the end of this year. The move is expected to further narrow the gap between YMTC and Samsung and Micron in terms of technology and production.

After experiencing rapid growth, YMTC urgently needs to expand its production capacity to further gain share in the global semiconductor market. YMTC’s current factory has been operating at near full capacity, producing 100,000 wafers a month by the end of 2021, two people familiar with the matter said.

Analysts expect YMTC to have a global market share of nearly 5% last year, making it the world's sixth-largest NAND flash memory maker, behind Samsung, SK Hynix, Kioxia, Western Digital and Micron.

Currently, about 40% of YMTC's output is 128-layer 3D NAND flash memory, which is by far the most advanced product produced by a Chinese chipmaker, and the rest is mainly 64-layer 3D NAND flash memory. This is behind global leaders such as Samsung, SK Hynix and Micron.

The new YMTC factory will initially mainly produce 128-layer flash memory, and if development goes well in 2023 and 2024, it may move to more cutting-edge chips such as 196-layer or 232-layer 3D NAND flash.

Apple has been testing YMTC's flash memory products since last year and may place "limited" orders for the first time as soon as this year, two people familiar with the matter said. In fact, Apple has been negotiating with YMTC since 2018, hoping to find cost-effective storage elements.

Winning Apple's order would be a milestone, industry executives said, highlighting the quality of YMTC's memory chips. One analysis showed that mainland China (including Hong Kong) became Apple's largest source of suppliers.

Currently, China is striving to localize semiconductor production and build industry champions. Analysts said that the success of YMTC is also a victory for Chinese semiconductors. YMTC is confident in its growth prospects, increasing its investment budget this year to $32.8 billion from $24 billion in 2016.

YMTC is currently installing equipment for the new plant, a key step before production starts, the people said. The new plant will eventually have twice the capacity of the first plant. The total production capacity of the two factories will reach 300,000 wafers per month, which will help YMTC expand its global market share to more than 10%.

YMTC has two parallel teams of hundreds of top engineers working on 196- and 232-layer flash storage, with the goal of catching up with foreign competitors, one of the people said.

Currently, Samsung, Micron and SK Hynix have all successfully produced the most advanced product on the market, the 176-layer 3D NAND flash memory chip. At the same time, they are racing to develop chips with more than 200 layers. Kioxia and Western Digital said they will manufacture 162-layer 3D NAND flash memory by the end of this year. The more layers a flash memory chip has, the more advanced the chip is and the harder it is to develop and commercialize it.

Most of YMTC's flash memory is used to manufacture consumer-grade solid-state drives (SSDs), mainly for the Chinese market. IT customers include leading storage equipment manufacturers Lenovo, Longsys, Kimtigo and ADATA. In addition, YMTC also launched its own brand, ZhiTai, to sell SSDs directly to consumers.

According to data from research firm Counterpoint Research, when 64-layer NAND flash memory was put into production for the first time in 2019, YMTC had a share of 1.3% in the global flash memory market. It has risen rapidly since then, reaching 4.8% in 2021. Counterpoint Research expects it to reach about 6% in 2023. Currently, YMTC has about 8,000 employees.