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YMTC targets 70% domestic equipment for fourth chip factory
YMTC plans to source 70% of equipment for its next Wuhan NAND factory from Chinese suppliers, up from just over half at its last plant. The facility will stack more than 300 memory-cell layers and begin construction next year.
China's largest flash memory chipmaker, Yangtze Memory Technologies Co (YMTC), plans to source up to 70% of equipment for its planned fourth factory from domestic suppliers, two people familiar with the matter told Reuters. The target marks a sharp increase from the third factory, where Chinese suppliers account for just over half of equipment purchases, and offers a concrete measure of how US export controls are reshaping semiconductor supply chains.
The fourth factory in Wuhan will produce YMTC's most advanced NAND chips, stacking more than 300 layers of memory cells vertically, the sources said. The plant will focus on storage chips for data centres and artificial intelligence applications. Construction is expected to begin next year, though YMTC has only held preliminary discussions with suppliers and has not placed formal orders.
Racing past rivals inside China
The 300-plus-layer target would give YMTC a higher memory cell layer count than South Korean competitors can produce within China. Samsung is converting its Xian factory to make 286-layer chips, while SK Hynix is upgrading a Dalian facility from 192 layers to 240 or more. Stacking additional layers increases storage density, allowing more data on a chip of the same physical size.
YMTC's NAND market share in China rose to 38.5% in the second quarter from 28% in 2025, according to data from market research firm Omdia. The company overtook Samsung as the top NAND maker in the country. YMTC and Samsung did not respond to requests for comment. SK Hynix declined to comment.
Where domestic suppliers stand to gain
Most of the additional domestic orders are expected to come from workhorse production stages including cleaning, polishing, and etching wafers. Chinese firms already supply most of YMTC's cleaning and polishing tools and have made progress in equipment used to form the deep vertical structures required for advanced NAND chips. The higher local-content target could benefit equipment makers including Naura Technology Group and Advanced Micro-Fabrication Equipment, the sources said.
YMTC remains dependent on overseas suppliers for sophisticated tools in lithography, inspection, and other advanced manufacturing processes. The US Commerce Department added YMTC to its Entity List in December 2022, imposing licensing requirements on American suppliers seeking to sell certain technology to the company.
Export controls and expansion plans
Samsung and SK Hynix require annual US authorisations to bring American-made chipmaking equipment into their Chinese plants. Washington indicated last year that it did not intend to approve equipment that would allow substantial capacity increases or major technology upgrades there. Reuters reported in April that YMTC was planning to build two additional factories in Wuhan, giving the chipmaker a total of five. When fully operational, the third, fourth, and fifth factories are each expected to process about 100,000 silicon wafers a month, more than doubling YMTC's manufacturing capacity.
Why this matters for operations and construction professionals
For operations and supply chain managers, YMTC's 70% domestic sourcing target signals a structural shift in semiconductor procurement that will ripple through equipment lead times, maintenance contracts, and supplier qualification requirements. Real estate and construction teams should track the timeline closely: a 2025 construction start for a facility processing 100,000 wafers per month represents a major infrastructure project with significant demand for specialised cleanroom construction, high-purity utility systems, and vibration-controlled foundations. Legal and government affairs professionals will need to monitor how US licensing restrictions evolve as Chinese firms demonstrate they can build advanced fabs with predominantly domestic tooling.