Chinese memory manufacturers are taking aim at the HBM market, where domestic companies are staking their survival. HBM, which significantly widens the data transfer path by vertically stacking general-purpose DRAM, is used as an AI semiconductor that must perform numerous computations simultaneously.
CXMT is the leading company driving China’s HBM innovation. CXMT aims to complete the certification process for mass production of HBM3, a 4th-generation HBM product, by the end of this year. CXMT is aggressively expanding its factories in Beijing and Hefei, and it is expected to increase HBM production capacity through these bases. The industry anticipates that Chinese companies will also mass-produce the 5th-generation HBM (HBM3E), currently the most advanced product, within two years.
Industry experts assess that if Chinese companies succeed in entering the advanced market, the impact would be difficult to imagine. Chinese companies have relied on government financial support thus far, but if they enter high-value markets like HBM, they can significantly increase their financial independence and engage in more aggressive research and development (R&D). According to market research firm TrendForce, HBM accounted for 5% of DRAM shipments last year but represented 20% of sales, demonstrating its overwhelming added value. An industry insider predicted, “The unmet HBM demand in China will increase further due to U.S. export restrictions. If Chinese companies resolve this and accumulate strength to enter the global stage, they could change the future HBM competitive landscape.”
Chinese offensive is also formidable in the NAND market, which is rapidly changing due to AI innovation. China’s YMTC surprised the industry by mass-producing the industry’s first 294-layer NAND in February this year, and its proprietary hybrid bonding technology is evaluated as advanced to the extent that domestic companies must use their patents.
Meanwhile, China is showing an aggressive stance in R&D investment as well. Last year, while competitors such as the U.S., Japan, and Europe were catching their breath, China increased its R&D investment ratio. According to the U.S. Semiconductor Industry Association, China invested 9.2% of its total semiconductor sales in R&D last year, an increase of 1.6 percentage points from the previous year (7.6%). This contrasts with major semiconductor industry countries such as the U.S. (19.3% → 17.7%), Japan (12.0% → 5.7%), and Europe (14.0% → 10.8%), which reduced their ratios during the same period.
Meanwhile, Chinese memory is on the verge of achieving a 10% global market share. In a situation where the U.S. is tightening its control over advanced semiconductor technology, China has doubled its market share in a year based on a solid domestic market and technological self-reliance.
According to TrendForce, the shipment-based market share of Chinese products in the memory market, combining DRAM and NAND, is expected to reach 10.1% in the third quarter of this year. This marks the first time Chinese companies have exceeded a 10% market share.
The market share of the Chinese memory industry first surpassed the 5% barrier in the second quarter of last year, recording 5.4%, and has nearly doubled in a year. This shows that U.S. sanctions on semiconductor technology and equipment exports to China have not stopped China’s semiconductor rise. Kim Yang-paeng, a senior researcher at the Korea Institute for Industrial Economics and Trade, analyzed, “China has offset the sanctions and increased its market share based on comprehensive government support and the domestic market.”
