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China’s biggest memory chipmaker has had to raise billions of dollars in fresh capital, after burning through $7bn in funding over the past year trying to adapt to tough US restrictions on its business.

Yangtze Memory Technologies Corp, which last December was added to a trade blacklist and prohibited from procuring US equipment to manufacture chips, exceeded its target for a new round, according to four people familiar with the situation.

They could not confirm the exact figure raised, but said it was equivalent to billions of dollars.

As China’s largest producer of NAND memory chips, the Wuhan-based company holds a crucial position in the country’s efforts to become self-reliant in semiconductors. But since last October, it has been hit by a series of US actions that restricted China’s access to advanced chip technology.

Last year, YMTC received a Rmb50bn ($7bn) capital increase from shareholders, including the China Integrated Circuit Industry Investment Fund, known as “the Big Fund”, for its major role in backing China’s chip industry.

Two people said high expenditure on replacing equipment and the development of new components and core chipmaking tools had already accounted for most of YMTC’s cash, necessitating a fresh financing campaign within less than a year.

The round was oversubscribed by domestic investors, according to another two people close to the company.

YMTC’s latest financing had concluded before Washington announced even stricter export controls last month, but the strong investor backing is being seen as a sign of solidarity in the face of the US restrictions.

YMTC chair Chen Nanxiang was elected as the new head of the China Semiconductor Industry Association last week and called for unity in countering an “unprecedented upheaval” in the global supply chain.

“YMTC is following in Huawei’s footsteps in bringing together the Chinese semiconductor industry to cope with the challenges of US pressure,” said a government official close to the company.

The company was expected to procure more equipment from Chinese suppliers while “tapping” some Japanese, South Korean and European vendors that the Chinese ones could not easily replace, said two company investors.

“If Chinese companies have equipment that can be used, [YMTC] will use it. If not, it will see if countries other than the US can sell to it,” said one of the investors. “If that doesn’t work, YMTC will develop it together with the supplier.”

The company had been working closely with Chinese etching equipment makers Naura and Advanced Micro-Fabrication Equipment (AMEC) to upgrade their technology, said two people close to YMTC. Etching equipment plays a key role in determining how many layers can be successfully stacked on a chip to achieve better storage performance at a lower cost.

Chinese companies won almost half of all equipment tenders from local chipmakers from January to August this year, according to an analysis by Huatai Securities last month.

“The ones that can be quickly replaced by Chinese equipment are less technically challenging tools,” said an executive at one Chinese chipmaker, who did not wish to be named. “The real challenge is to make the advanced ones.”

YMTC, Naura and AMEC did not respond to a request for comment.

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