In recent days, the administrator of Jiangsu Advanced Memory Semiconductor Co., Ltd. (AMS) announced that its court-approved restructuring plan had failed due to a serious breach of contract by the intended investor, Huaxin Jiechuang Integrated Circuit Manufacturing (Guangdong) Co., Ltd. As a result, the final restructuring attempt for one of China's last unfinished 12-inch wafer fabs has officially collapsed.

According to the statement, AMS is insolvent, and all equity held by its shareholders—Huai'an HuaiShu Technology Development Co., Ltd. and Beijing Advanced Memory Technology (AMT)—has been legally written off. The administrator terminated the investment agreement on June 13, 2025, citing Huaxin Jiechuang's failure to pay the restructuring funds despite an agreed extension.

Founded in 2016 in the Huai'an National High-Tech Industrial Development Zone, AMS was a joint venture between AMT and Huai'an Yuanxing Investment Co., Ltd. The project aimed to develop and mass-produce next-generation phase-change memory (PCM) products. It involved a planned investment of RMB 13 billion to build a 12-inch fab with an annual output of 100,000 PCM wafers. At its peak, AMS even imported a lithography machine worth RMB 209 million ($28.7 million) from ASML.

Despite initial progress—including product development breakthroughs and early commercial samples—AMS was bogged down by financial distress beginning in 2020. It failed to pay suppliers, contractors, and employees, ultimately falling into bankruptcy. In July 2023, the Huaiyin District People's Court in Jiangsu accepted AMS's bankruptcy filing and began auctioning its assets, including the ASML scanner, which failed to sell.

In early 2024, the court approved a restructuring plan backed by Huaxin Jiechuang, a company formed in August 2023 with RMB 2 billion in capital. The investor pledged to transform AMS into a foundry focused on display driver ICs (DDIC), power management ICs (PMIC), and high-reliability memory and RF chips. AMT, which owns the PCM IP, would continue operations independently.

However, Huaxin Jiechuang failed to deliver the promised capital. Following further delays and missed deadlines, the administrator formally voided the agreement, forcing AMS to restart the investor search process.

AMS's failure marks the final collapse of China's last known abandoned 12-inch fab project. At one time, Huai'an was the only prefecture-level city in China with two advanced 12-inch semiconductor projects (the other being Dehuai Semiconductor). AMS had even achieved pilot production and introduced 2Mb PCM chips by 2019.

In total, AMS's unpaid liabilities exceed RMB 863 million, involving hundreds of creditors including equipment suppliers, contractors, logistics firms, and former employees. Its case adds to a growing list of failed large-scale fab projects in China, including Wuhan Hongxin, Chengdu GlobalFoundries, and Nanjing Decorma. Unlike AMS, those projects were eventually acquired and revived by other investors.

The AMS collapse underscores persistent challenges in China's semiconductor sector: over-investment, project mismanagement, and difficulties in attracting long-term strategic capital. While some abandoned fabs have found saviors, AMS now stands as a sobering reminder that not every project can be rescued.