Move intended to cut dependence on foreign suppliers SK Hynix, Samsung and Micron
ChangXin Memory Technologies (CXMT) is racing to produce China’s first domestic high bandwidth memory, a critical component in artificial intelligence computing, as the country battles U.S. export controls and looks to reduce its reliance on foreign suppliers.
CXMT has already ordered and received some manufacturing and test equipment from U.S. and Japanese suppliers that is suitable for assembling and producing HBM, sources with direct knowledge of the matter said.
“CXMT is keen to secure crucial equipment for HBM production, which isn’t currently subject to export controls, even though their HBM technology itself isn’t yet ready for mass production,” one chip industry executive told Nikkei Asia.
Based in Hefei, in eastern China, CXMT is the country’s top maker of dynamic random access memory chips. Since last year, the company has prioritized the development of technologies for vertically stacking DRAM chips together to replicate the architecture of HBM chips, the sources said.
DRAM chips are vital components for everything from computers and smartphones to servers and connected cars, enabling fast data access for processors during the computing process. Stacking them into HBMs widens communication channels, allowing for turbocharged data transfer. HBM has become a heated area for investment because of its potential to accelerate the computing and applications of artificial intelligence. The Nvidia H100 chip, the computing power behind ChatGPT, combines a graphic processor with six HBMs to enable fast, human-like responses.
CXMT also managed to secure equipment for its second plant in Hefei that will produce the country’s most advanced DRAM by a local supplier, though it will still be less advanced than products from Samsung and SK Hynix of South Korea.
Some leading American equipment suppliers, including Applied Materials and Lam Research, had received licenses from Washington to ship chip production tools to the Chinese memory chipmaker since mid-2023, two sources said.
In October 2022, the U.S. introduced sweeping export controls aimed at curbing almost all aspects of Beijing’s chip ambitions, including the ability to make cutting-edge DRAM, but following consultations has granted some licenses to some suppliers for slightly less advanced tech.
CXMT did not immediately respond to Nikkei Asia’s requests for comments.
Founded in 2006, CXMT announced late last year that it had started production of the country’s first LPDDR5 memory chips, the current mainstream mobile DRAM in the industry, suitable for high-end smartphones. Chinese smartphone makers such as Xiaomi and Transsion have completed verifications of CXMT’s mobile DRAM chips, according to the company. Industry leaders started producing such chips in around 2021.
This advancement puts CXMT just behind top U.S. memory chipmaker Micron and SK Hynix in terms of technology, and ahead of Taiwan’s Nanya Technology, which focuses more on the specialty market rather than mass consumer electronics business. However, CXMT had less than 1% of the global market for DRAMs in 2023, while the three dominant players — Samsung, SK Hynix and Micron — controlled more than 97%.
HBM production, meanwhile, is dominated by the two world’s biggest DRAM chipmakers, SK Hynix and Samsung, which together controlled more than 92% of the global market in 2023, according to Trendforce. Micron, which had about a 4% to 6% share, aims to enlarge its HBM presence.
Producing HBM not only requires high-quality DRAM production capability but also extensive chip packaging techniques to link those chips together. China does not yet have local chipmakers that can produce HBM chips to accelerate AI computing.
Brady Wang, a semiconductor analyst with Counterpoint, told Nikkei Asia that China wants to achieve self-sufficiency in HBM but faces many challenges.
“When your DRAM technology already lags behind global rivals, that puts your HBM technology at a disadvantage to be competitive in a fully commercial market. Not to mention that HBM production requires complex design and manufacturing expertise to materialize. … It could be a steep climb,” Wang said. “It’s not that easy for China’s national champion to break the international dominance in the sector. Its primary objective remains fulfilling China’s domestic demand.”