China’s chip maker Jiangsu Advanced Memory Semiconductor enters bankruptcy and liquidation after failing to secure new rounds of financing

By Greg Gao

(JW Insights) Aug 29 -- Jiangsu Advanced Memory Semiconductor(AMS, 江苏时代芯存半导体), a storage chip fab startup, has became insolvent and officially entered the bankruptcy and liquidation process after failing to secure new rounds of financing, JW Insights reported.

Located in Huai’an, eastern China’s Jiangsu Province, the 12-inch wafer plant initially aimed at an investment of RMB13 billion($1.78 billion) and aspired to produce 100,000 pieces of phase-change memory annually.

In July 2023, the local court in Huai’an accepted AMS's bankruptcy and liquidation case and publicly auctioned an ASML lithography machine valued at RMB143 million($19.6 million).

One industry insider informed JW Insights that the second-hand ASML lithography machine (model: 1950Hi) purchased by AMS was priced at $28.68 million. Including this equipment, the company purchased 54 main equipment units and 290 auxiliary equipment units, with a total value of approximately RMB1.49 billion. AMS had outstanding payments for a significant portion of the equipment.

As the local government seeks to minimize losses, individually auctioning AMS's second-hand equipment and factory premises would yield limited funds due to equipment depreciation and other outstanding debts. Therefore, the government is more inclined to find a qualified entity to take over AMS as a whole. 

For potential buyers, there is no risk in acquiring AMS’ second-hand equipment through auction. Nevertheless, taking over the plant in its entirety, modifying the process path, and revitalizing a wafer fab without prior mass production experience is a challenging endeavor, an analyst from JW Insights pointed out. 

AMS was established in October 2016 with two corporate shareholders, Jiangsu Advanced Memory Technology Corporation and Huai’an Yuanxing Investment. The company focuses on developing and producing the latest PCM memory products.