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YMTC, known for its hybrid bonding patent deal with Samsung and its push toward 294-layer NAND production, has quietly revealed mounting losses. Financial disclosures tied to an investment by Hebei Yangyuan Zhihui Beverage Co showed that YMTC posted an 84 million yuan (about US$11.6 million) loss in the first nine months of 2024, according to the South China Morning Post and Sina Finance.
According to the reports, Hebei Yangyuan Zhihui Beverage Co invested 1.6 billion yuan (about US$219 million) in YMTC, becoming its eighth-largest shareholder. The deal, signed in December 2023 but disclosed only last Friday due to commercial secrets, values YMTC at 161 billion yuan, the report adds.
South China Morning Post suggests that the top seven shareholders of YMTC are all state-backed. The Big Fund — China’s main chip investment vehicle — also holds a combined 23.67% via two subsidiaries, the report notes.
R&D Investment Surge in 2023-24
However, what really caught public attention is why YMTC posted such a big loss despite its rapid rise. According to Sina, the company spent 5 billion yuan on R&D in 2023 — 16.7% of its revenue — to ramp up production of fourth-generation TLC/QLC products and 232-layer 3D NAND chips. In 2024, it pushed R&D spending even higher to 6 billion yuan, betting on 294-layer NAND and LPDDR5 DRAM technologies, the report notes.
It is worth noting that according to ZDNet, Xperi (U.S.), YMTC (China), and TSMC (Taiwan) hold most hybrid bonding patents. As Samsung aims to begin mass production of its V10 NAND by the second half of 2025, it reportedly teams up with YMTC, leveraging the latter’s expertise on “Xtacking” technology, ZDNet adds.
IDM Model May Further Drive Costs
Nevertheless, YMTC showed volatile earnings in recent years. Sina reports that YMTC’s total assets grew from 132.7 billion yuan at the end of 2023 to 134.7 billion yuan by September 2024. Despite a 531 million yuan profit in 2023, the company posted an 84 million yuan loss in the first nine months of 2024, citing restricted equipment access, delayed expansion, and market downturns as key factors, as per Sina.
According to Sina’s analysis, unlike other memory chipmakers that follow a fabless model and focus only on chip design, YMTC, as China’s only IDM specializing in 3D NAND, faces much higher costs for equipment purchases and process development, which significantly impacts its overall financial performance.
Founded in July 2016, YMTC focuses on the design and production of 3D NAND chips. As highlighted in a Liberty Times report, its growth hit a wall in October 2022 when Washington introduced sweeping export controls targeting memory products like DRAM below 18nm and NAND with 128 layers or more. Two months later, YMTC was officially blacklisted, further tightening its access to critical supplies, the report adds.
Meanwhile, YMTC’s sister company XMC, founded in 2006, posted 3.146 billion yuan in revenue and 138 million yuan in net profit in the first nine months of 2024, according to Liberty Times. XMC specializes in NOR Flash memory and runs Central China’s first 12-inch semiconductor production line.
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(Photo credit: YMTC)