The production capacity of ChangXin Memory Technologies (CXMT), a D-RAM corporations leading China's memory push, is said to have peaked in the fourth quarter of last year and hit a ceiling. While the United States is expected to tighten export controls and the Chinese government is going all out to localize semiconductor equipment, the prevailing view is that new capacity additions will be constrained by restrictions on advanced semiconductor equipment.
According to data from market research firm Omdia obtained by ChosunBiz on the 12th, CXMT's average monthly wafer (semiconductor substrate) output has reached its maximum at about 240,000. After steadily expanding production capacity since 2024, CXMT is expected to remain in a lull throughout this year, according to key industry sources.
CXMT's current D-RAM production capacity is about half that of industry No. 2 SK hynix and slightly more than one-third of Samsung Electronics, according to estimates. On an annual basis last year, Samsung Electronics' D-RAM production capacity was about 7.6 million wafers, SK hynix's was 5.97 million, and Micron's was 3.6 million. CXMT doubled its wafer output last year from a year earlier to scale up, but its pace is set to slow starting this year.
Cha Yong-ho, an analyst at LS Securities, said, "CXMT's capacity expansion is being constrained by tighter U.S. export controls. China is aware of this, and the third-phase investment fund is being concentrated on semiconductor equipment," and added, "If China succeeds in localizing equipment next year, CXMT could resume expansions, including its new Shanghai plant, starting in 2027."
However, CXMT's Production yield for D-RAM is a drag. Although aggressive facility investments are bulking up its footprint, actual output has reportedly fallen short. The explanation is that low yields are creating a gap between installed capacity and production. While the rated wafer capacity is high, actual shipment share is likely lower due to defective product issues and other factors.
According to market research firm Counterpoint Research, as of 2024, the Production yield of CXMT's main 1x (first-generation 10-nanometer-class) D-RAM process is 42% lower compared with the 1a (fourth-generation 10-nanometer-class) process yields of the three memory leaders, including Samsung Electronics and SK hynix. For Samsung Electronics and SK hynix, the 1a process yield is classified as a mature node, while CXMT is still stuck around the 50% level.
There are also views that growth could be hampered as the U.S. government is expected to tighten restrictions on Chinese semiconductor equipment corporations. Last month, Reuters reported that Republican and Democratic lawmakers introduced a bill to ban corporations receiving subsidies under the CHIPS Act from purchasing Chinese-made equipment for 10 years.
A semiconductor industry official said, "Unlike NAND flash, in the case of D-RAM, the complexity of design and process means it will take considerable time for CXMT to adopt advanced processes comparable to Samsung Electronics or SK hynix," adding, "As you move into the early 10-nanometer range, the need for advanced tools such as extreme ultraviolet (EUV) lithography equipment increases, but securing such equipment is difficult due to U.S. controls."