Not only the giants of the storage industry are currently stumbling, smaller companies have also gotten into trouble. According to media reports, the recently emerging Chinese manufacturer YMTC will lay off employees and delay the construction of a new factory in Wuhan. This should kill two birds with one stone.
The memory industry is almost on the bottom
The memory industry is in free fall in some areas, not only has the demand for DRAM and NAND dropped significantly, prices have also collapsed. The industry giants Samsung, Micron and SK Hynix are reacting very differently to this. While Samsung hardly makes any cuts at its own expense and thus wants to secure further market shares, Micron and SK Hynix are striving for significant corrections in expenditure (CAPEX) and production in order not to make any losses.
The current sales crisis does not stop at other manufacturers either. The Yangtze Memory Technologies Co. (YMTC) wants to lay off ten percent of its employees, and the construction of the factory in Wuhan will be further delayed. It is difficult to tell from the outside how exactly the status of the plant, which was originally planned as a US$ 24 billion project, is. Goals were repeatedly set and delays were the order of the day, most recently the partner, the Chinese Tsinghua Unigroup, filed for bankruptcy.
As the South China Morning Post (SCMP) reported at the weekend, YMTC has also significantly reduced orders for technical equipment for operation in the factories, by up to 70 percent. These have already been made in the last four months. The SCMP had already reported problems and possible upcoming layoffs at the end of 2022.
YMTC is also fighting with US trade restrictions
Like many Chinese companies, YMTC is not only fighting the current market crisis and its effects, but also the trade restrictions in the USA. Since October, YMTC has been on a list of companies with which relationships must be restricted. Since then, YTMC has reduced factory equipment orders. Shortly before, it looked as if YMTC could gain Apple as a customer and thus become significantly better known. Due to the restrictions, however, Apple was forced to obtain storage elsewhere.