“The company’s plants in Hefei and Beijing are already running at full capacity,” a source told Nikkei Asia , adding that CXMT sees very high demand from local companies to expand capacity as soon as possible. Samsung and SK hynix have both warned customers that memory supply tightness is likely to persist into 2027 as they continue allocating capacity to AI .
Commodity DDR5 for PCs and servers is constrained primarily because suppliers have redirected investment and wafer starts toward HBM, which carries substantially higher margins and is essential for AI accelerators. SK hynix currently dominates this space , supplying around 60% of global output, with Samsung and Micron splitting most of the remainder. All three vendors are expanding HBM capacity, but doing so comes at the expense of conventional DRAM , which has rocketed in price , creating a massive demand-side gap among consumers calling for more supply.
CXMT and YMTC clearly want to fill this gap. While the former remains a few generations behind the leading edge, it has demonstrated working DDR5 designs — mass production is still delayed — and has reportedly delivered HBM samples to domestic AI customers, including Huawei. Chinese sources cited by Nikkei suggest that CXMT intends to add dedicated HBM3 production lines as part of its Shanghai fab, with initial volumes aimed at domestic AI accelerators.
Meanwhile, YMTC is leveraging its packaging expertise to move into HBM. Rather than competing head-to-head with CXMT on DRAM process technology, YMTC is expected to focus on advanced assembly and HBM integration, working with local partners to produce memory stacks suitable for AI workloads. 50% of the company’s new plant’s capacity will produce DRAM, according to Nikkei. “They [YMTC] started to develop their own DRAM more than two years ago… now it’s only a matter of time for them to produce quality DRAM and HBM going forward,” said one of YMTC’s suppliers
If successful, these expansion efforts will give China a vertically integrated domestic HBM supply chain, spanning DRAM wafer fabrication, stacking, and final assembly, without relying on outsiders.
That is exactly the outcome that the U.S. and its allies have attempted to slow down through export controls that restrict Chinese access to advanced manufacturing equipment. Currently, rules limit tool sales for sub-18nm DRAM processes and 128-layer or more 3D NAND, and explicitly target advanced packaging technologies relevant to HBM.
Despite these restrictions, Chinese memory makers have continued to make incremental progress by relying on older-generation tools and domestic equipment vendors. CXMT’s recent and unexpected demonstrations of high-speed DDR5 and LPDDR5X parts seriously highlight just how much headroom for progress still exists even in the absence of advanced tooling like EUV.
Chinese memory maker CXMT prepares $4.2 billion USD IPO to take advantage of tight memory market
Chinese semiconductor industry gears up for domestic HBM3 production by the end of 2026
Leading PC manufacturers considering using Chinese memory chips, report claims
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/pc-components/dram/SPONSORED_LINK_URL
- https://www.tomshardware.com/pc-components/dram/chinas-cxmt-and-ymtc-to-expand-memory-output#main
- https://www.tomshardware.com
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Informational only. No financial advice. Do your own research.