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China's leading flash memory maker, Yangtze Memory Technologies (YMTC), plans to source up to 70% of its new factory equipment domestically. The company aims to strengthen China's chip industry by reducing reliance on foreign suppliers. The planned factory in Wuhan could begin construction in 2027 and produce advanced NAND flash memory chips.
Two people familiar with the plans told Reuters that YMTC targets at least 60% local equipment purchases. The company hopes to raise that share to 70%, compared with just over 50% at its third factory. The move comes as US export restrictions limit China's access to advanced semiconductor manufacturing technology.
The new factory will produce NAND chips with more than 300 layers of memory cells. These chips store data even when devices lose power. More layers allow each chip to hold more information without increasing its physical size.
YMTC expects the factory to supply storage chips for data centers and artificial intelligence applications. Demand for these products makes advanced memory production increasingly important for the technology industry.
The higher local sourcing target could benefit Chinese equipment makers such as Naura Technology and Advanced Micro-Fabrication Equipment. These companies already supply tools for cleaning, polishing and etching silicon wafers. YMTC expects more domestic suppliers to handle these production stages.
However, the company still depends on foreign suppliers for advanced equipment. These include tools for chip patterning, inspection and other complex manufacturing processes. Domestic companies have not replaced overseas suppliers across every production stage.
US export restrictions have increased pressure on Chinese chipmakers to develop local alternatives. Washington added YMTC to its Entity List in December 2022. The restrictions require US suppliers to obtain licenses before selling certain technologies.
YMTC has also strengthened its position in China's memory market. Its NAND market share reached 38.5% in the second quarter, up from 28% in 2025. The company also moved ahead of Samsung to become China's leading NAND producer.
The planned factory could further increase YMTC's production capacity. Its third, fourth and fifth factories could each process 100,000 silicon wafers monthly. Together, these facilities could more than double the company's manufacturing capacity.
The plan remains at an early stage, with construction expected to begin in 2027. YMTC must finalize supplier agreements before placing equipment orders.
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