As China's memory semiconductor company Changxin Memory Technologies (CXMT) quickly pursues domestic corporations like Samsung Electronics and SK hynix, reports suggest that CXMT's production capacity is expected to decrease more than anticipated as U.S. semiconductor industry sanctions against China intensify. While CXMT threatens memory semiconductor companies by encroaching on the legacy memory market, projections indicate that the export restrictions on advanced semiconductor equipment necessary for cutting-edge DRAM manufacturing will make it difficult not only for expanding production capacity but also for developing next-generation DRAM such as high-bandwidth memory (HBM).
According to the industry on the 29th, CXMT's annual DRAM production capacity is expected to be more than 10% lower than initially anticipated. It was reported that CXMT planned to secure a production capacity of 300,000 wafers per month by the end of this year through massive facility investments. However, as U.S. sanctions take effect, it is analyzed that the production capacity will be around 250,000 wafers per month. Currently, CXMT's production capacity is said to be about 200,000 wafers per month.
CXMT is quickly trailing behind domestic memory semiconductor companies such as Samsung Electronics and SK hynix. It is not only increasing its market share in the legacy memory semiconductor market, such as DDR4, through aggressive low-cost strategies, but it is also accelerating the mass production of advanced memory semiconductors like DDR5. According to market research firm Counterpoint Research, CXMT's share of the global DRAM market (based on shipments) is projected to grow from 7% this year to 10% by 2027. Counterpoint Research noted, "China's CXMT is rapidly closing in on the general-purpose DRAM market, and the competition in HBM is also becoming increasingly fierce."
CXMT is also tightening its efforts to stabilize the yield of DRAM, including DDR5, and developing HBM, a core memory semiconductor used in AI accelerators. While Chinese AI semiconductor design firms like Huawei are ramping up the development of AI chips that can run AI models, they are experiencing supply difficulties because HBM, a key component, has been designated as an item under U.S. export controls. A person in the semiconductor industry said, "As the demand for HBM development from Chinese AI semiconductor companies like Huawei increases, CXMT is also in the process of developing HBM3 (4th generation HBM)."
However, with CXMT expected to be included in the list of U.S. export control businesses, analysis suggests that the import of foreign advanced equipment such as Applied Materials and Lam Research will be restricted. According to foreign media outlets such as the Financial Times (FT), the U.S. Department of Commerce's Bureau of Industry and Security (BIS) is reportedly considering adding companies like China's CXMT to the export "Entity List," which prohibits transactions with U.S. companies. It has been reported that many engineers from U.S. equipment companies that supplied CXMT have already withdrawn.
As importing foreign semiconductor equipment essential for mass-producing advanced DRAM is restricted, the expansion of production capacity is expected to slow somewhat. Roh Geun-chang, director of the Hyundai Research Center, said, "CXMT is gaining presence in the DRAM market, but with its designation as a target of U.S. export restrictions this year, difficulties in importing foreign equipment are expected, and production capacity is likely to decrease more than anticipated."
A person in the semiconductor industry stated, "Chinese corporations are accelerating self-sufficiency in semiconductor equipment in response to U.S. export controls, but they are still heavily dependent on foreign equipment for advanced memory semiconductor manufacturing," adding, "As U.S. sanctions intensify, not only will expanding production capacity become difficult but developments in HBM will inevitably face challenges as well."