[News] Samsung Reportedly Mulls to Offload Outdated NAND Equipment in China to Local Companies

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As Samsung is reportedly scaling down its foundry and legacy DRAM production, the South Korean semiconductor giant is now said to be planning the sale for its outdated equipment in China, including the NAND Flash facilities in Xi’an, according to a report by the Chosun Daily.

The report notes that the struggling semiconductor giant is gearing up to sell old equipment from multiple front-end and back-end production lines, which could not be sold in a timely manner and have been accumulating due to pressure from Washington.

The equipment set for sale primarily consists of 100-layer 3D NAND machinery, according to the Chosun Daily. Since last year, Samsung has been transitioning its Xi’an plant to 200-layer production processes, the report notes.

According to another report by the Korea Economic Daily, following Samsung’s current mass production of its 286-layer V9 NAND flash chips, the company’s Device Solutions division is targeting the production of vertical NAND with a minimum of 400 stacked layers as early as 2026, which makes the 100-layer 3D NAND machinery outdated.

The Chosun Daily report indicates that the old machines are expected to be sold through local Chinese companies or third parties. Memory giants such as Samsung and SK hynix have traditionally sold their used equipment to external companies through brokers after replacing it with advanced machinery, with China rumored as a major buyer.

It is worth noting that following the U.S. Commerce Department’s ban in October 2022 on exporting advanced semiconductor equipment to Chinese companies, these sales have reportedly ceased. According to the report, under U.S. regulations, equipment used in DRAM production processes of 18nm or below, system semiconductors of 14nm or below, and NAND flash memory of 128 layers or above cannot be exported to China.

However, in order to secure Validated End User (VEU) status from the U.S. government, Samsung and SK hynix have rumored to refrain from selling old equipment, even those not restricted by these sanctions, the report suggests.

Once a company is included in the VEU program, it can export items specified in collaboration with the U.S. Commerce Department without a separate permit process or expiration, resulting in an indefinite waiver of U.S. export control regulations, the report explains.

Despite these concerns, following weaker third-quarter results, Samsung is set to begin extensive organizational restructuring and cost-saving measures by the end of the year. As Samsung is expected to adjust utilization rates and staffing levels on its domestic legacy lines, similar changes are anticipated for its Chinese facilities, according to senior management cited by the report.

Read more

• [News] SK hynix and Samsung Reportedly to Reduce Legacy DRAM Production like DDR4
• [News] SK hynix and Samsung Reportedly Step up Focus on HBM4 and CXL amid Rising Chinese Competition

(Photo credit: Samsung)