The Impending NAND Apocalypse Reinforces China’s Drive for Global Tech Supremacy

Dr. Roslyn Layton recently talked with Dylan Patel, a leading semiconductor industry analyst, about the evolving nature of the semiconductor industry as it relates to security, technology, and the recent NVIDIA hacks.

During the conversation, Patel also highlighted the NAND market and impending “NAND Apocalypse” given China’s investment vis-a-vis their “Made in China” plan. He stated, “The NAND apocalypse is the result of Chinese subsidies into semiconductors, totaling roughly $250 billion across 2020 to 2025. They’re ‘Made in China’ plan has them going to a very high percentage of domestically produced chips. And NAND is a critical component within that… YMTC is able to produce NAND memory chips, critical memory that’s used in nearly every device and server and military application. And they will be able to essentially cause margins in the entire industry to fall heavily due to these huge subsidies… like they have in other industries in the past such as solar.”

Given China’s motivation and drive toward global tech supremacy, the United States is losing its competitive edge as well. Last week, we highlighted two recent reports on China’s motivation for attain cyber dominance. The latest Director of National Intelligence’s Annual Threat Assessment (ATA) stated: “China uses coordinated, whole-of-government tools to demonstrate strength and compel neighbors to acquiesce to Beijing’s preferences.” Simply put, gaining an advantage in the technological sphere gives Beijing another weapon by which it can coerce other nations, including the U.S., in pursuit of its geopolitical goals.

Dylan’s analysis on the NAND apocalypse suggests China is getting closer to its goal. The United States needs to counter that aggression in deterring China but also investing in infrastructure in maintaining supremacy in both semiconductor and cyber policies. Putting YMTC, which is the PRC’s state-owned national champion for memory chips, on the Entity List needs to be part of the strategy.

Dylan Patel is the Chief Analyst for SemiAnalysis, and he publishes a newsletter discussing the semiconductor industry which you can view here.

You can watch his explanation of the NAND Apocalypse here: