YMTC Plans 500,000-Wafer Monthly Capacity With Two New Wuhan Fabs as Domestic Equipment Crosses 50%

By NineScrolls Team · 2026-04-16 · 5 min read · Industry

YMTC's Three-Fab Expansion Would Create World's Largest NAND Capacity

Yangtze Memory Technologies (YMTC), China's largest NAND flash producer with an 11.8% global market share, is planning two additional fabs in Wuhan beyond the Phase 3 plant already under equipment installation. Each of the three new facilities is designed for 100,000 wafers per month at full capacity. Combined with YMTC's two existing Wuhan fabs — which produce a combined 200,000 wafers per month — the expansion would push total capacity to 500,000 wafers per month, making YMTC the world's largest NAND wafer producer by output.

Phase 3 construction is complete and equipment installation is underway. Operations are expected to begin in late 2026, ramping to 50,000 wafers per month by 2027. Timelines for Phase 4 and Phase 5 have not been disclosed, but Reuters reported that YMTC has already begun planning for the additional factories amid heightened U.S.–China trade tensions.

Phase 3 Clears Beijing's 50% Domestic Tooling Threshold

In a milestone for China's semiconductor equipment industry, more than 50% of the tools installed in YMTC's Phase 3 fab have been sourced from domestic suppliers. This is the first time a major Chinese memory fab has cleared Beijing's 50% domestic equipment mandate at this scale. For context, domestically manufactured equipment typically accounts for just 15% to 30% of the total tools deployed in Chinese fabs.

The achievement is significant because YMTC has been on the U.S. Commerce Department's Entity List since December 2022, restricting its access to American semiconductor technology. To clear 50% domestic tooling without a domestic leading-edge lithography tool, YMTC has had to substitute deeply in other process steps — including etch, deposition, CMP, photoresist removal, cleaning, and metrology.

AMEC, Naura, and Piotech Lead the Equipment Supply

Macquarie identified Advanced Micro-Fabrication Equipment (AMEC) and Naura Technology Group as the primary beneficiaries of YMTC's expansion. AMEC, China's leading etch equipment maker, provides critical tools for 3D NAND etch applications — the process step that accounts for roughly 26% of total equipment spending at a memory fab, according to Gartner data. Naura, China's largest chip equipment maker by revenue, supplies a broader portfolio spanning deposition, etching, and cleaning tools. Its order backlog is already scheduled through Q1 2027.

Piotech, a Chinese PECVD specialist, has also made notable progress at YMTC. TrendForce reported in January 2026 that Piotech's PECVD equipment share on YMTC's 3D NAND lines doubled from 15% to 30%. Across all Chinese fabs, etching and thin-film deposition systems have exceeded a 40% domestic adoption threshold — well above the 35% national average for all equipment categories.

Up to 180 Billion Yuan in New Capital Spending

YMTC has invested over 270 billion yuan (approximately $37 billion) across its first three phases. Macquarie estimates the two new fabs will require an additional 160 to 180 billion yuan ($22–25 billion) in capital expenditure over the coming years. With Gartner data showing that 75–80% of total fab capex goes to production equipment, the two new fabs alone could generate $17–20 billion in equipment orders.

The spending comes as total order value for China's domestic equipment suppliers surged approximately 80% compared with the same period in 2025, driven by both YMTC's expansion and parallel investments at SMIC, Hua Hong, and other Chinese chipmakers racing to meet Beijing's self-sufficiency mandates.

YMTC's Quiet DRAM Ambition

All three new plants will allocate capacity to both NAND flash memory and DRAM production, with the exact split dependent on YMTC's DRAM development progress. YMTC has sent low-power DRAM samples to clients and expects feedback by year-end. A successful DRAM entry would expand the company's equipment requirements significantly — DRAM fabs require different deposition stacks, tighter etch profiles, and additional ALD steps compared to 3D NAND production.

What This Means for Plasma Processing and Thin Film Deposition

YMTC's expansion is the largest single demand signal for domestic Chinese plasma processing and thin film deposition equipment in the industry's history. Three new 100,000-wafer-per-month fabs, each requiring hundreds of etch chambers, PECVD reactors, and CVD systems, represent a multi-year equipment procurement cycle worth tens of billions of dollars. AMEC's etch tools, Naura's deposition and etch platforms, and Piotech's PECVD systems are positioned to capture a majority share of this spending.

For the global equipment supply chain, the implications cut both ways. Western equipment makers — Applied Materials, Lam Research, Tokyo Electron — are locked out of YMTC sales by U.S. export controls, ceding ground to Chinese competitors in the world's fastest-growing fab market. But the same controls are accelerating domestic Chinese capabilities in plasma etch, PECVD, and CVD at a pace that will increasingly challenge incumbent suppliers in non-restricted markets as well.

The equipment sub-segments most affected include plasma etch systems for high-aspect-ratio 3D NAND channel holes, PECVD tools for silicon nitride and silicon oxide multilayer stacks, CVD systems for tungsten and polysilicon fill, and ALD reactors for high-k dielectrics in DRAM. Vacuum component suppliers, gas delivery system manufacturers, and plasma source producers serving Chinese equipment OEMs are also seeing order growth as AMEC, Naura, and Piotech scale their tool production to meet YMTC's timeline.