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Why it matters: YMTC is one of China’s biggest success stories in the semiconductor space, but its progress in developing advanced memory technology has slowed significantly as a result of US export controls. The Chinese company is now alleging that US-based competitor Micron Technology has been using its innovations in 3D NAND technology without paying its fair share.
China’s largest flash memory maker Yangtze Memory Technologies Co (YMTC) is suing Micron Technology for patent infringement. The former alleges that its American competitor has been using its intellectual property to develop and manufacture 3D NAND products and “freeriding” to maintain its market share.
The lawsuit was filed on Thursday at the U.S. District Court for the Northern District of California and targets Micron and its Micron Consumer Products subsidiary. YMTC claims the two organizations infringed on no less than eight of its patents about architectural, power management, operational, and manufacturing techniques for 96-, 128-, 176- and 232-layer 3D NAND chips.
A YMTC spokesperson told Reuters the company expects a swift resolution for the patent dispute, while Micron has yet to provide an official statement on the matter. As with all patent litigation, both sides are looking at years of arguing in court over the merits of each claim. The patents in question seem to describe key aspects of NAND technology that all major players employ when developing their memory products.
The timing of the lawsuit is interesting as it comes just as US lawmakers are mulling tighter export controls for advanced chipmaking tools. Dutch company ASML has already stopped shipping cutting-edge EUV equipment to China, but that has yet to stop companies like Huawei or YMTC from making progress in developing and manufacturing high-performance AI GPUs and high-density flash memory that are increasingly attractive on the global market.
Back in December, YMTC along with 30 other companies was banned from importing US-made technology and components. In response, the Chinese government imposed a ban on Micron products for key infrastructure operators following a failed network security review. Despite seeing its orders plunge in the region, Micron is still trying to mend its relations with China and is looking to invest 4.3 billion yuan (around $590 million) into expanding its Xi’an factory in the Shaanxi province.
As for YMTC, its ability to compete in the global market will depend on whether it can adapt to tightening US export restrictions. The Chinese company has already burnt through $7 billion in state-sponsored funding over the past year. And while it has proudly touted a 232-layer 3D NAND breakthrough, mass-producing it in a cost-effective way will no doubt prove difficult without a stable supply chain.
Meanwhile, Micron is chugging along despite the company’s revenues taking a huge hit this year. The latest quarterly report already shows a small recovery in overall sales thanks in part to its bets on HBM3 Gen2 products for AI HPC accelerators. Micron also expects sales of consumer-grade memory products will recover next year fueled by PC upgrades.
Masthead credit: Inside Taiwan
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