China’s largest domestic manufacturer of 3D NAND flash memory chips, Yangtze Memory Technologies Company Limited (Yi Memory), has filed a lawsuit against Micron Semiconductor Limited for allegedly infringing upon eight of its US patents. This legal action underscores Yi Memory’s efforts to protect its innovative achievements in 3D NAND technology and uphold the development rights of China’s semiconductor industry.
The lawsuit, filed in the Northern District Court of California on November 9th, 2023, accuses Micron of utilizing Yi Memory’s patented 3D NAND innovations without authorization. Specifically, it addresses Micron’s attempts to impede competition and maintain market share by driving Yi Memory out of the 3D NAND flash market. For Micron, headquartered in the US, this represents not just a legal dispute but also highlights the rising capabilities of Chinese semiconductor companies.
Yi Memory’s Pioneering Role in 3D NAND Flash Memory
As China’s largest domestic producer of 3D NAND flash memory chips, Yi Memory has made significant innovative strides within the 3D NAND domain. This lawsuit centers around eight patents that aim to safeguard these achievements, underscoring the technical prowess and innovation potential of Chinese semiconductor enterprises.
The eight US patents Micron is accused of infringing cover a wide spectrum of Yi Memory’s 3D NAND products, ranging from 96 layers to 232 layers. By taking legal action, Yi Memory seeks to resist infringement and firmly back the advancement of Chinese semiconductor technology.
Yi Memory’s pioneering position in 3D NAND is no coincidence. Their breakthroughs in mass-producing 232-layer NAND flash vividly demonstrate China’s independent innovation capabilities within the semiconductor sphere.
Overcoming Obstacles from US Sanctions
However, US sanctions imposed on Yi Memory in 2022 have posed substantial hurdles to its technological progress. By restricting the production of NAND flash above 128 layers, these sanctions have directly impacted Yi Memory’s capacity expansions.
Despite these challenges, Yi Memory has continued pushing forward through unrelenting R&D investments, infusing new vigor into China’s semiconductor landscape. Experts believe that based on the technical merits of its patents, Yi Memory stands a strong chance of winning this lawsuit against Micron.
Suite of Cutting-Edge 3D NAND Products
The US patents Micron is accused of infringing upon encompass Yi Memory’s entire suite of advanced 3D NAND offerings:
- Patent No. 10,950,000 – Covers Yi Memory’s 96-232 layer 3D NAND products
- Patent No. 11,518,122 – Relates to Yi Memory’s 128-232 layer 3D NAND technology
The lineup of products utilizing these patented innovations includes:
- 96-layer 3D NAND
- 128-layer 3D NAND
- 232-layer 3D NAND
As the only domestic entity in China producing 232-layer NAND flash chips, Yi Memory has established itself as a global leader in technological breakthroughs. However, its competitive edge has also made it the target of severe US trade restrictions.
US Sanctions Undermine China’s Semiconductor Ambitions
The October 2022 sanctions disrupted Yi Memory’s supply chain, hampering its ability to produce NAND flash above 128 layers. By limiting access to critical equipment and components, these measures have directly impacted Yi Memory’s capacity expansions and technological growth.
Moreover, the sanctions also threaten China’s broader ambitions to build a self-reliant and globally competitive semiconductor industry. While targeting individual companies like Yi Memory, their goal is to systematically undermine China’s domestic chipmaking capabilities.
Gradual Catch-Up by Foreign Competitors
Despite these external constraints, Yi Memory has continued to pioneer new innovations in NAND flash memory. Within just three years, it has progressed from 32 layers to 64 layers, and eventually to 128 layers.
However, foreign competitors like Samsung, SK Hynix, and Micron have been gradually catching up. Samsung and Micron are now rolling out 300-layer 4D NAND flash chips offering higher densities. And SK Hynix has even developed samples of 321-layer flash memory.
This competitive convergence presents a serious challenge to Yi Memory in retaining its technological edge and market leadership. Once these overseas manufacturers release their next-gen 300-layer NAND flash products, market shares seem poised for significant reshuffling.
Micron’s China Woes Compound its Situation
As a US semiconductor giant, Micron already faces operational troubles in China. In May 2023, Chinese regulators identified major security risks with Micron’s products, prompting a temporary nationwide procurement ban.
This has visibly impacted Micron’s bottom line. For Q4 2023, its China revenue plunged 40% versus last year to just $4.01 billion. Consequently, Micron posted a sizable $1.43 billion net loss for the quarter and $583 million net loss for the full year.
Although Micron is now aggressively expanding production in India and Japan, it still relies heavily on China for over 20% of global sales. To reclaim access to this critical market, Micron has promised to address the security flaws in its offerings. This includes a $4.3 billion investment in a new packaging plant in Xi’an, China.
However, Micron’s spend still lags behind rivals like Samsung and SK Hynix which have secured Chinese government approvals for supplying certain equipment locally. With domestic Chinese memory suppliers also on the rise, Micron faces threats on multiple fronts.
China’s Semiconductor Industry Surges Ahead
Contrarily, sanctions have failed to impede China’s broader semiconductor progress. Instead of dampening investment, they have stimulated further domestic innovation and capacity growth. With brisk momentum across several leading Chinese tech firms, China produced 15.5 billion chips in 2023—a 16.2% year-on-year jump.
SMIC, Hua Hong, ChangXin, and other semiconductor makers have all logged major advances in R&D and next-gen memory platforms. Their continued success reinforces China’s expanding influence and competitiveness on the world stage for cutting-edge memory and logic chips.
Conclusion: A Significant Milestone for Domestic Innovation
By suing Micron over patent infringements, Yangtze Memory’s actions represent a pivotal moment for China’s homegrown semiconductor ecosystem. This legal maneuver showcases the impressive technical prowess of Chinese companies in spearheading advanced memory innovations traditionally dominated by overseas incumbents.
More broadly, it signals to both domestic and international markets that China’s semiconductor ambitions are steadily gaining ground through consistent R&D improvements. With support from national policies and domestic tech giants, this lawsuit underscores that the Chinese semiconductor industry has accumulated sufficient independent strengths to resist external constraints and thrive into the future.