Top Chinese memory chip maker YMTC said to be laying off 10 per cent of workforce after US sanctions

The YMTC employee told the Post that the lay-offs affect “almost all departments” and range from 5 to 10 per cent of staff. Dismissed employees who purchased subsidised housing but worked at the company for less than five years were asked to repay amounts ranging from 300,000 yuan to 1 million yuan, he added.

The US Commerce Department’s Bureau of Industry and Security put YMTC, along with 35 other Chinese entities, on the trade blacklist that restricts procurement of US products and services without Washington’s approval. The US alleges that YMTC has provided products to companies already under its export controls, including Huawei Technologies Co and surveillance camera maker Hangzhou Hikvision Digital Technology Co.

YMTC’s fourth-generation 3D flash memory chip. Photo: Handout

YMTC’s fourth-generation 3D flash memory chip. Photo: Handout

The Post reported last week that YMTC may even postpone construction of its second wafer fab in Wuhan due to disruptions to its procurement supply chain.

YMTC has not publicly commented on the impact of the US sanctions. However, industry analysts have said it will be very hard for the chip maker to continue developing its latest 3D NAND flash technology, known as Xtacking 3.0, having been denied access to advanced semiconductor manufacturing equipment.

In mid-October, a week after the new US export controls were imposed, the company was still recruiting fresh graduates, offering generous salary packages, including at least 15 days of annual leave and the right to purchase a new home in a specified residential compound in Wuhan city at 40 per cent below market value.

Global sales of memory chips, which make up a quarter of all semiconductor sales, recorded a 10 per cent year-on-year decline in 2022 amid a “significant collapse in demand”, according to a report from market research firm Gartner.

Top US memory chip maker Micron Technology announced in December that it would be laying off 10 per cent of its workforce after reporting lower-than-expected earnings for its first fiscal quarter of 2023.


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