China's memory semiconductor industry leader Changxin Memory Technologies (CXMT) is expected to enter the highly technical high bandwidth memory (HBM) market following DRAM, causing tension for Samsung Electronics and SK hynix.
Despite U.S. sanctions, CXMT, which has rapidly secured technological capabilities, is projected to affect the Korean memory semiconductor industry in the coming years if it accelerates mass production of advanced products like HBM in addition to legacy products.
According to industry sources on the 12th, CXMT is reportedly investing in facilities to produce HBM2, a second-generation HBM product. HBM2 is a product that Samsung Electronics and SK hynix began mass production of in 2016. Although CXMT is nearly a decade behind Korea, experts believe that the specifications of HBM2 products are already standardized, which could lead to faster development compared to cutting-edge HBM.
An industry official noted, "It’s true that in terms of product development speed, China is quickly catching up to threaten Korean corporations. The design of older HBM, like DRAM and NAND flash, is also already standardized, so development can proceed quickly. However, it's uncertain whether mass production technology can be secured within 1 to 2 years."
The issue is that CXMT's development speed has accelerated significantly since the 2020s. According to Chinese consulting firm Chen Zhan, as of 2020, Chinese DRAM had a global market share of 0%, but that share increased to 5% last year. In the past, the prevailing view in the domestic semiconductor industry was that mass production of Chinese DRAM would be impossible or would take more than 10 years.
Not only older DRAM like DDR4, but also recently, CXMT has shown progress in DDR5 development, raising concerns about large-scale mass production. According to market research firm Tech Insight, the linewidth of Chinese DDR5 DRAM is determined to be not significantly inferior compared to Samsung Electronics and SK hynix, indicating that the technological gap is rapidly narrowing.
With China's rapid rise, Samsung Electronics and SK hynix find themselves at a critical crossroads. Both companies, which have already begun to feel the impact of the onslaught of Chinese products in the DDR4 DRAM market, have started to feel anxiety over what might happen in five years.
Yu Hwa-jun, a distinguished professor at KAIST's Department of Electrical Engineering, stated, "The products already released by Samsung Electronics and SK hynix have improved in technology to the extent that Chinese corporations could develop prototypes within about a year. However, they may face some challenges in the processes required for large-scale mass production."
Professor Yu suggested that since it is virtually impossible to compete with China in terms of volume and price in the general memory market, there is a need to change the business paradigm and diversify the portfolio. He explained that breakthroughs should be made with 'customized' memory technologies such as processing in memory (PIM) and compute express link (CXL), which are considered next-generation strategic businesses for Samsung Electronics and SK hynix.
He explained, "PIM is ultimately customized DRAM, and it must coincide with process technology while establishing close partnerships with clients. This is an area where our country excels in process technology. Currently, there is a boom in the semiconductor market related to artificial intelligence (AI), and opportunities can be created in the on-device AI market with customized memory like PIM."