Chinese memory semiconductor companies Changxin Memory Technologies (CXMT) and Yangtze Memory Technologies (YMTC) are strengthening their influence in the global memory semiconductor market by nearly doubling their production capacity after about a year.
Since last year, Chinese memory, which has begun to show its presence in the general-purpose DRAM market dominated by Samsung Electronics and SK hynix, starting with legacy DRAM, is boosting its competitiveness driven by domestic market demand and government subsidies. In addition, it is also challenging advanced product lines such as high-bandwidth memory (HBM) and 300-layer 3D NAND flash, narrowing the gap with Samsung Electronics and SK hynix.
According to a recent report from Omdia obtained by ChosunBiz on the 21st, the DRAM production capacity of CXMT (based on wafer input) has expanded by about 70% this third quarter to 720,000 wafers, compared to 420,000 wafers during the same period last year. On an annual basis, CXMT's DRAM wafer production is expected to grow from 1.62 million wafers last year to 2.73 million wafers this year.
Just 2 to 3 years ago, CXMT's share in the global DRAM market was so insignificant that it couldn't be captured in numbers, but it is rapidly increasing production lines and shipments in a short period of time. According to Omdia's shipment forecast for next year, CXMT's DRAM shipments are expected to approach those of Micron, the third-largest company in the industry. This is why there are predictions that the current three-company dominance in DRAM (Samsung Electronics, SK hynix, Micron) will shift to a four-company structure.
NAND flash is also experiencing oversupply in the market due to the rapid increase in YMTC's production volume. While major corporations such as Samsung Electronics, SK hynix, Kioxia, and Micron are continuing to reduce production due to falling NAND flash prices, YMTC has significantly ramped up production at its Wuhan Phase 2 factory since the first quarter of last year. YMTC's NAND production from its Wuhan Phase 2 line reached 130,000 wafers in the second quarter this year, more than doubling from 60,000 wafers during the same period last year. YMTC's total NAND production has also increased by 42% compared to the same period last year.
The two companies are expanding their portfolios not only with general-purpose and legacy memory but also with advanced products. CXMT is showing a faster-than-expected pace in the high-bandwidth memory (HBM) market, which is led by SK hynix. CXMT plans to complete the certification process for mass production of its fourth-generation HBM products, HBM3, by the end of the year.
A semiconductor equipment industry official noted that "CXMT is aggressively expanding its factories in Beijing and Hefei, and it is expected to invest in facilities for HBM packaging in the future," and explained that "CXMT has set an internal goal to begin mass production of the state-of-the-art fifth-generation HBM (HBM3E) within two years, which is currently led by SK hynix and Micron."
YMTC is also focusing on advancing its technology by increasing the number of layers in 3D NAND flash. The higher the number of layers, the better the performance. Just like building a high-rise apartment, as the number of layers increases, more data can be stored and processed. Currently, the highest number of layers in mass production NAND is 321 layers from SK hynix, followed by 286 layers from Samsung Electronics, and 270 layers from YMTC. Although it is still lower than Samsung Electronics and SK hynix, it is catching up to a comparable level. The market research firm TechInsights evaluated that YMTC achieved significant progress, recording 20.47 gigabits (Gb) per square millimeter (㎟), a performance metric for NAND.
Meanwhile, the NAND market has been in a state of oversupply throughout the year. Samsung Electronics is estimated to have reported losses in its NAND business during the second quarter of this year, despite entering production cuts for a long time, and other memory corporations are also experiencing deteriorating profitability due to continuous price declines. Previously, market research firm TrendForce had downgraded its annual growth forecast for NAND flash demand from 30% to 10-15%.