According to a report from Korean media ZDNet Korea, Chinese memory manufacturers like CXMT (Changxin Memory Technologies) are aggressively expanding production, which could negatively affect profitability in the traditional DRAM market. Both Samsung and SK hynix are said to be closely monitoring these developments.

Established in 2016, CXMT has become China’s largest DRAM producer with government backing, focusing on traditional DRAM and preparing to enter the HBM market.

Reportedly, CXMT has rapidly increased its DRAM production capacity, from 70,000 wafers per month in 2022 to 120,000 in 2023, and is projected to reach 200,000 wafers this year.

CXMT’s main products include 17nm and 18nm DDR4 and LPDDR4, with its latest offerings being 12nm DDR5 and LPDDR5X, which the company is also developing. Its aggressive DRAM expansion could negatively impact sales and profits for Korean memory manufacturers.

According to TrendForce’s data, the spot price of 16Gb DDR4 increased from $3 in the second half of 2023 to $3.50 in the first half of this year, before falling back to $3.30 in the second half of 2024.

For DDR5, prices have increased from $4.20 in October 2023 to over $4.50 in the first half of this year, approaching $5 in the second half.

By the end of August, the price premium of DDR5 over DDR4 had surged to 53.9%, up significantly from 36.9% six months earlier.

Per a recent report from Nomura Securities cited by ZDNet Korea, the rapid expansion of Chinese companies is expected to negatively impact the memory industry’s profitability, necessitating preparations for potential disruptions. CXMT’s production now accounts for about 5% of the market, potentially influencing prices.

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(Photo credit: CXMT)

According to TrendForce, as the United States continues to expand the content of various lists, successively pass anti-China bills, and explicitly prohibit the export of certain products to China, the two countries have gradually drifted apart and this antagonistic relationship will continue if no drastic changes occur between the two parties in the next 6-8 years.

In the face of U.S. encroachment, all sectors in China must continue to look for escape routes if the country wishes to tear down the many walls built by the U.S. and move towards industrial autonomy. China’s top priority is to make breakthroughs in the semiconductor field. As far as current development is concerned, there are still many companies in China’s domestic IC design industry moving towards advanced manufacturing processes even after leading manufacturers such as Huawei, Changsha Jingjia Microelectronics, and Goke Microelectronics were placed on the entity list. At the same time, semiconductor manufacturers such as SMIC, CXMT, and Yangtze Memory Technologies have repeatedly developed advanced process technologies while Hua Hong Group has gradually expanded in the field of mature processes. If this trend continues, it will not be difficult for China to realize semiconductor autonomy in processes above 10nm.

If U.S. effectively enforces EDA ban and does not expand controls, impact on China will emerge in 2025

The U.S. Department of Commerce’s export restrictions on Chinese manufacturers are escalating but the autonomy of China’s domestic semiconductor industry is also gradually increasing. As the confrontation between the United States and China intensifies, the United States has launched a new wave of export control measures. On August 12, 2022, the U.S. Department of Commerce announced that it will restrict the export to China of EDA software required to design integrated circuits with GAAFET structure. Since GAAFET is a structure that is used in processes below 3nm, this move is equivalent to setting an advanced threshold for China’s semiconductor development.

Domestic Chinese IC designers who are committed to the development of SoCs, cloud computing chips, and GPUs are destined to move to more advanced manufacturing processes in order to meet the iterative needs of product upgrades and are expected to move toward the 4nm manufacturing process in the next 2 to 4 years. If the U.S. effectively implements the EDA software ban and does not expand the scope of EDA software restrictions, the impact of the ban on China’s semiconductor industry is expected to gradually emerge in 2025, not only delaying the development schedule of some domestic Chinese IC designers but even causing developmental stagnation.

（Image credit: Pixabay）