DOMESTIC semiconductor conglomerate Tsinghua Unigroup has formed a new business unit for producing DRAM, a type of memory chip dominated by firms in South Korea and the United States.

The move comes as China tries to boost the country’s chip industry, and specifically its DRAM sector, amid an ongoing spat over trade and technology with the United States that has underscored China’s reliance on key imported components.

DRAM, or dynamic random access memory, has proven especially difficult for Chinese companies to produce at scale. U.S.-based Micron Technology and South Korea’s Samsung Electronics and SK Hynix together account for over 95 percent of global DRAM market share.

It is not clear how the new unit will affect operations at the conglomerate’s Unigroup Guoxin Microelectronics Co. unit, which had already set out to make DRAM. Unigroup Guoxin said in its 2018 annual report it has yet to mass produce LPDDR4 DRAM, the industry standard in most mobile phones.

Another Chinese DRAM aspirant, Fujian Jinhua, had yet to reach mass production for its chips when the U.S. Government in October placed it on an entity list that effectively barred American companies from supplying it with goods and services.

Ken Kuo, vice president of research at TrendForce in Taipei, said in a note that the establishment of the new chip unit is likely to stem in part from the Fujian Jinhua blacklisting.

“Especially after the trade clash between the United States and China, how to make products that are compatible and competitive internationally remains a critical issue for China,” he wrote.

In 2017, Tsinghua Unigroup announced plans for a US$30 billion plant in Nanjing to make NAND and DRAM chips. The facility remains under construction. (SD-Agencies)