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Wednesday, June 20, 2018
Memory Industry News
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China firm to invest $2.71 billion to develope 19nm DRAM

Wednesday, November 01, 2017

China-based GigaDevice Semiconductor and Hefei RuiLi Integrated Circuit Manufacture (formerly Hefei ChangXin IC) will team up to develop 19nm DRAM process technology for the production of 12-inch wafers at a total investment of CNY18 billion (US$2.71 billion), a move widely seen to usher in a new stage of competition in China's DRAM market, according to industry sources.

The tie-up will enable the two firms to jointly compete against the other two major players in the China DRAM industry, Yangtze Memory Technology under Tsinghua Unigroup, and Fujian Jinhua Integrated Circuit affiliated with Taiwan-based United Microelectronics (UMC), to win the crowns in the fields of DRAM, NOR flash and 2D NAND in China.

The collaboration is based on a five-year cooperation agreement signed between Hefei Industry Investment Group (HIIG), which wholly owns Hefei Ruili IC, and Beijing-based GigaDevice, with the former to contribute 80% of the total investment of CNY18 billion and the latter 20%.

New force in China DRAM industry

Under the pact, GigaDevice will enjoy priority access to DRAM products jointly developed for sales to its customers at preferential prices. This, coupled with its existing NOR flash and 2D NAND product lines and the capacity support of Hefei Ruili's new 12-inch DRAM wafer plant, is likely to make GigaDevice a new force in China's memory industry.

In early 2017, Hefei Ruili IC announced an investment of US$7.2 billion to build a 12-inch wafer fab, with a maximum monthly production capacity set at 125,000 pieces. The company is scheduled to start equipment installation in the first quarter of 2018.

GigaDevice, founded in 2005, is now among the world's top-five suppliers of NOR flash products, together with Cypress, Micron, Micronix and Winbond, and it also supplies 38nm and 24nm SLC and MLC NAND products. In September 2017, GigaDevice obtained a significant financial support from China's National IC Industry Investment Fund (aka Big Fund), which is now the firm's second largest shareholder with an 11% stake.

Fierce competitions looming

The emerging GigaDevice-Hefei Ruili camp is likely to trigger fierce competitions in the China memory market. As Yangtze Memory Technology under Tsinghua Unigroup, which mainly focuses on the development of 3D NAND products, has also had the Big Fund as its major shareholder, whether both camps will vie for more financial resources from the fund remains to be observed, according to industry sources.

Meanwhile, GigaDevice and Hefei Ruili are scheduled to complete the development and trial run of the 19nm process technology with a yield rate of 90% by the end of 2018, with the timetable quite close to the similar DRAM deployment by the UMC-Jinhua camp. Accordingly, whichever of them takes the lead to kick off volume production of DRAM will firmly capture the title as the No. 1 DRAM supplier in China, the sources said.

By: DocMemory
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