It is reported that the US chip restrictions have put great pressure on Changjiang Storage, and the company has to seek billions of dollars in new funding. Changjiang has burned through about $7bn in the past year, according to the Financial Times, and is now being forced into a new fundraising drive.

Headquartered in Wuhan, Changjiang is the most important NAND memory producer in China and has a leading position in the push for semiconductor self-sufficiency. However, in December last year, Changjiang Storage was placed on a US trade blacklist, barring it from purchasing American chip-making equipment. In addition, starting last October, the United States took a series of actions to restrict China's access to advanced chip technology.

To cope with those restrictions, Changjiang Storage last year raised 50 billion yuan ($7 billion) in capital through shareholders, one of whom is China's State Integrated Circuit Industry Investment Fund, which plays a major role in supporting the mainland's chip industry.

The Financial Times report noted that the high cost of replacing equipment, developing new parts and important chip-making tools has eaten up most of Changjiang's cash, so the company must make a new fundraising effort within a year.

Two of the company's investors said that Yangtze Storage plans to increase the number of parts or equipment from Chinese suppliers, can not replace the equipment will be asked outside the United States, Japan, South Korea and European manufacturers can supply, if it is not feasible, Yangtze Storage will work with suppliers into research and development.

Separately, two people close to Changjiang Storage said the company had been working closely with NAura, the Chinese etching equipment maker, and China Micro to upgrade their technology. Etching equipment is critical to how many "layers" are successfully stacked on a chip in order to allow the chip to achieve better storage performance at a lower cost.

However, the head of a Chinese semiconductor company said: "The equipment that can be quickly replaced by Chinese equipment is the less technically difficult tool." The real challenge is in producing advanced products."

Changjiang Storage, NaURA and China Micro did not respond to requests for comment by press time.

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