An article captioned 'US-China tech war: Beijing’s secret chipmaking champions' in the Financial Times (May 12) on China's efforts to eliminate dependence on foreign components and sources for making chips highlighted the efforts of Yangtze Memory Technologies Co. Describing the Wuhan-based Yangtze Memory Technologies Co. (YMTC) as the vanguard of China's efforts to create a domestic semiconductor industry, it disclosed that it is already mass-producing state of the art 64-layer and 128-layer Nand flash memory chips, used in most electronics from smartphones to servers to connected cars. It stated China is frustrated at its dependence on chips, semi-conductors etc in the U.S., which accounts for eighty per cent of the market in some chipmaking and design processes such as etching, ion implantation, electrochemical deposition, wafer inspection and design software. It quoted the China Semiconductor Industry Association as saying China imported $350bn worth of semiconductors last year. The FT report stated that YMTC, has remained under the radar of the US government, but the company is taking no chances and with Beijing's guidance has launched a massive review of its supply chain in an effort to find local suppliers — or, at least, non-US ones — to replace the dependence on American technology. The collective effort has occupied more than 800 people, full time, and including staff from its multiple local suppliers, for two years. YMTC is seeking to learn as much as it can about the origin of everything that goes into its products, from production equipment and chemicals to the tiny lenses, screws, nuts and bearings in chipmaking machinery and production lines, multiple sources familiar with the matter said. The audit extends not only to YMTC’s own production lines, but also to suppliers, suppliers’ suppliers, and so on. YMTC has sent engineers to audit local equipment suppliers’ production sites to verify that the origins of parts have been truthfully reported. American-made parts are scored highest for risk, followed by parts bought from Japan, Europe and those made locally. Suppliers are asked to explain how they can together diversify procurement and find alternatives. It said the purge of YMTC’s supply chain is being handled with the spirit of a national emergency, for example even when Wuhan was ravaged by Covid-19 last spring and the city endured a brutal quarantine, high-speed trains remained in service to ferry YMTC employees to its US$ 24bn 3D Nand flash memory plant that began producing chips in 2019. It quoted the the state-backed China Securities Journal to disclose that subsidies and investment from local governments and the private sector amounted to at least US$170bn since 2014, and numerous Chinese companies replicating those in the US have sprung up to take advantage. Examples cited were: YMTC is strikingly similar in approach and strategy to Boise, Idaho-based Micron; Beijing-based Naura Technology Group represents a challenge to Applied Materials, Santa Clara, California; Shanghai’s Advanced Micro-Fabrication Equipment (AMEC) iplans to rival Lam Research of the US, renowned for building essential etching machines; Shanghai Micro Electronics Equipment, under majority control by the Shanghai government, hopes to compete against global chip lithography machine builders of ASML; and Tianjin-based Hwatsing Technology produces cutting-edge chemical-mechanical planarisation equipment and is set to break Applied Materials’ monopoly. The US-based research firm IC Insights said when China’s State Council set out its “Made in China 2025” industrial policy in 2015, it set a goal of 70 per cent self-sufficiency in semiconductors by 2025. But the industry has fallen short of this goal and in 2020, China-based chip production accounted for only 15.9 per cent of the domestic market and the firm estimated it would reach just 19.4 per cent in 2025. Of the 2020 total, China-based companies accounted for only 5.9 per cent of domestic sales, while foreign companies with their headquarters in China accounted for the rest of the China-based sales.