Chinese semiconductor manufacturer Yangtze Memory Technologies (YMTC) is reportedly planning to construct two new chip factories in Wuhan, a move that would significantly expand its production capacity. This expansion comes at a time of heightened trade tensions between the United States and China, as Beijing seeks to reduce its reliance on foreign technology.
Sources familiar with the matter indicate that YMTC intends to build two new fabrication plants (fabs) in addition to a Phase 3 plant currently under construction. Each of these new facilities is projected to produce 100,000 wafers per month at full capacity. This would bring the total potential output to 400,000 wafers per month, more than doubling the current combined capacity of YMTC’s existing two fabs, which stands at 200,000 wafers per month.
The Phase 3 plant is expected to commence operations by the end of this year, reaching 50,000 wafers per month by 2027. The plans for the two additional fabs are contingent on the successful outcome of the Phase 3 operations.
The expansion is occurring against a backdrop of U.S. restrictions on the export of advanced chipmaking equipment to China. In response, YMTC is increasing its reliance on Chinese-made tools. For its Phase 3 plant, over 50% of the equipment has been sourced from domestic suppliers, including Advanced Micro-Fabrication Equipment (AMEC). This marks a significant increase from YMTC’s overall domestic tool adoption rate of approximately 45%, which is already the highest among Chinese fabs.
YMTC is a major player in the global NAND flash memory market, holding an estimated 11.8% share in 2025, according to a UBS report cited by Reuters. The company is also exploring the production of DRAM, with samples sent to clients for feedback. YMTC is reportedly allocating about 50% of its Phase 3 capacity to DRAM production, signaling a strategic diversification beyond NAND flash. Furthermore, the company is believed to be developing advanced packaging technologies for high-bandwidth memory (HBM), crucial for AI accelerators.
While the expansion could eventually lead to more affordable SSDs for consumers, the full impact on market supply and pricing will depend on the successful ramp-up of these new facilities and the ongoing geopolitical landscape surrounding semiconductor technology.