China's YMTC plans up to 70% domestic equipment for fourth Wuhan chip factory, sources say

China's biggest flash memory chipmaker is trying to wean itself off foreign equipment, and it is setting a higher bar with each new factory.

Yangtze Memory Technologies Co (YMTC) plans to buy at least 60% of the equipment for a planned fourth factory from domestic suppliers, with an ambition of reaching 70%, according to two people familiar with the matter who spoke to Reuters on condition of anonymity. They said they were not authorized to speak to the media.

The company has not confirmed the plan. YMTC, Samsung and the US Commerce Department did not respond to requests for comment. SK Hynix declined to comment.

A step up from Factory No. 3

YMTC's third factory is due to begin operating later this year. Chinese suppliers account for just over half of its equipment purchases, the sources said. The fourth plant would push that share higher.

The fourth factory is planned for Wuhan, where YMTC is based. It is expected to make the company's most advanced NAND chips, with more than 300 layers of memory cells stacked vertically. The plant is expected to focus mainly on storage chips for data centers and artificial intelligence applications.

More layers means more storage density: more data on a chip of the same physical size.

Construction is expected to begin next year. For now, YMTC has held only preliminary discussions with suppliers and has not placed formal orders, the sources said.

Scale of the buildout

When fully operational, the third, fourth and fifth factories are each expected to process about 100,000 silicon wafers a month, according to the sources. Together they would more than double YMTC's current manufacturing capacity.

Crypto Briefing, citing industry figures, put the company's two existing fabs at roughly 200,000 wafers a month combined. It also reported that the third factory's ramp calls for 50,000 wafers a month by 2027. Those figures have not been confirmed by YMTC.

Where the tools would come from

The higher local-content target could benefit Chinese equipment makers including Naura Technology Group and Advanced Micro-Fabrication Equipment, the sources said.

Most of the added domestic orders are expected in workhorse production stages such as cleaning, polishing and etching wafers. Chinese suppliers have already proven their equipment on YMTC's production lines in those areas, the sources said. Chinese firms already supply most of YMTC's cleaning and polishing tools.

The limits are also clear. According to the same sources, YMTC remains reliant on overseas suppliers for some sophisticated equipment, including lithography and inspection tools. A 70% domestic share by count or spend is not the same as an independent supply chain.

Export controls and the rivals

US export controls constrain YMTC's access to some American chipmaking technology. They also complicate efforts by South Korean rivals to expand or upgrade their own factories in China.

Samsung is converting its Xian factory to make 286-layer chips, Reuters previously reported. SK Hynix is upgrading a Dalian facility to 240 layers or more from 192. A YMTC plant making 300-plus-layer chips would exceed what either rival can currently produce in China.

YMTC is already gaining ground at home. Its NAND market share in China rose to 38.5% in the second quarter from 28% in 2025, and it overtook Samsung as the top NAND maker in the country, according to data from research firm Omdia.

The controls were meant to slow China's advanced chip capability. This plan shows one result: a state-backed champion directing more of its purchasing to domestic toolmakers, with a guaranteed customer for firms like Naura and AMEC.

Money questions

Financing is a separate variable. Crypto Briefing reported that YMTC's parent, CCSH, has paused a planned IPO of about CNY 33 billion ($4.9 billion), citing market volatility and regulatory caution. YMTC has not publicly addressed that report in the material cited here.

What to watch

The 60% floor and 70% ambition are targets, not contracts. The test comes next year, when construction is expected to begin and YMTC is expected to move from preliminary talks to formal equipment orders. Whether Naura, AMEC and other domestic suppliers win those orders, and whether the Commerce Department responds to the plan, will show how much of it holds up.