China's YMTC rattles NAND market, raising fears for Samsung and SK hynix

Global Semiconductor and AI Industry Seminar held at National Assembly

'YMTC is no longer a follower — it's a top-tier rival'

Samsung Electronics' market share continues to shrink

YMTC capacity expansion stokes volatility fears amid AI boom

Experts urge Samsung, SK hynix to shift toward high-value NAND products

Titus Lo, senior vice president of YMTC, receives the Best Memory Innovation Technology award for the company's proprietary Xtacking 4.0 technology at Flash Memory Summit 2025 in Santa Clara, California, last August. [YMTC website]

"In terms of production capacity and technology, YMTC has already moved beyond the concept of being a 'follower.' It has now entered the ranks of the world's top-tier competitors."

Choi Jeong-dong, senior vice president at TechInsights, made the assessment of Chinese NAND flash manufacturer YMTC (Yangtze Memory Technologies Co.) at the Global Semiconductor and AI Industry Seminar held Monday at the National Assembly Members' Hall in Yeouido, Seoul.

"Rather than talking about YMTC as a potential threat, it is more accurate to say it has become a definitive competitor," Choi said.

YMTC's NAND market share has climbed sharply over the past five years, closing in rapidly on top rivals including Samsung Electronics, SK hynix and Micron.

According to TechInsights, Samsung Electronics held a 28 percent share of the global 3D NAND market by revenue in the second quarter of this year — still first place, but well below the 35 percent it recorded in the third quarter of 2021.

YMTC, by contrast, surged from just 2 percent five years ago to 13 percent in the second quarter of this year, vaulting into the world's top four. The company, only a decade old, now competes on par with Kioxia and SanDisk, which each have nearly 40 years of history.

"I did not expect YMTC's share to rise this fast," Choi said. "The NAND market structure is becoming multipolar."

Democratic Party of Korea lawmakers Jeong Jin-uk and Ahn Do-geol host the Global Semiconductor and AI Industry Seminar at the National Assembly Members' Hall in Yeouido, Seoul, on Monday. [Kim Hyun-il]

Choi cited China's powerful domestic market as the key driver behind YMTC's rise. Chinese semiconductor companies — spanning AI processor makers such as Huawei and Cambricon, foundries, equipment suppliers and packaging firms — are tightly interconnected, enabling rapid technology validation and fueling the company's explosive growth.

Dan Kim, chief strategy officer at TechInsights, noted at the seminar that while the US administration's export controls on semiconductor manufacturing equipment have effectively constrained China's broader chip industry, YMTC represents an exception.

The NAND segment is driven not by extreme miniaturization but by a race to stack memory cells vertically to ever-greater heights — a competition largely insulated from export controls on EUV lithography equipment, which is needed to etch ultra-fine circuits onto wafers.

"In YMTC's case, there are no constraints from EUV export controls, so we expect its output to grow consistently," Dan Kim said.

YMTC plans to bring its third factory in Wuhan online by year's end and begin full-scale production there next year. News broke in May that the company intends to build two additional factories, sending ripples through the industry. The capacity expansion has raised concerns that it could once again trigger a NAND supply glut.

NAND flash chips mass-produced by Chinese manufacturer YMTC using its proprietary Xtacking technology. [YMTC website]

Major players including Samsung Electronics, SK hynix and Kioxia have until now held back on large-scale capacity additions to manage NAND supply — a stance widely attributed to the painful lesson of 2023, when a supply glut left the industry sitting on massive inventories and posting losses in the trillion-won range.

Surging AI demand has driven sharp price increases in NAND, following a similar trend in DRAM, lifting earnings across the sector — but rising supply from YMTC is seen as a key wildcard.

"YMTC's growing production capacity is a serious concern," Choi said. "If supply expands, price volatility could intensify again. Over the medium to long term, a slowdown in demand could trigger a price war."

For Samsung Electronics and SK hynix, that would mean losing the earnings tailwind they are currently enjoying from rising NAND prices.

"Korea needs to increase the share of high-value products — enterprise SSDs (solid-state drives), AI storage, high-performance interfaces — rather than focusing on sheer production volume," Choi advised.

"What will matter more is not who produces the most, but who earns the greatest trust and recognition for performance inside AI data centers," he added.

joze@heraldcorp.com