China-based CXMT's aggressive production expansion may disrupt global DRAM market

[Daniel Nenni]

Credit: AFP

With strong backing from the Chinese government, Changxin Memory Technologies (CXMT) is aggressively expanding its DRAM production capacity, potentially challenging the triopoly led by Samsung Electronics, SK Hynix, and Micron.

CXMT has steadily increased its production capacity each year, supported by government subsidies, according to reports from Newsis and Bloter, citing Nomura Securities. The company's output grew from 120,000 wafers per month at the end of 2023 to 160,000 in the first quarter of 2024 and is projected to reach 200,000 by year-end, representing 11% of global DRAM production.

Nomura Securities predicts that if CXMT expands its DRAM production capacity as planned, it will account for 15% of the global DRAM market. In terms of production volume alone, it would become the world's fourth-largest DRAM manufacturer after Micron.

CXMT's rapid expansion could challenge the Big Three's dominance in the DRAM market, which has been established since the early 2010s. However, with a global market share of under 1% and a focus on older products like DDR4 and LPDDR4, CXMT remains two to four years behind in cutting-edge technologies such as HBM3E, DDR5, and LPDDR5X, according to analysts.

In February, Nikkei reported that CXMT is working to develop its first domestically-made high bandwidth memory (HBM) in response to increasing US export controls. The report indicated that CXMT had placed orders with US and Japanese suppliers for equipment needed for HBM production, which is not yet restricted by export controls.

In March, Bloomberg reported that the US is considering adding six Chinese companies, including CXMT, to its trade blacklist, as part of a broader effort to restrict China's development of advanced semiconductors. CXMT said the company complies with US export regulations and supports fair competition, emphasizing that its products are primarily used in everyday consumer goods, underscoring its focus on civilian and commercial applications.

Source: IDC, September 2024

China-based CXMT's aggressive production expansion may disrupt global DRAM market

With strong backing from the Chinese government, Changxin Memory Technologies (CXMT) is aggressively expanding its DRAM production capacity, potentially challenging the triopoly led by Samsung Electronics, SK Hynix, and Micron.

www.digitimes.com

 

[Fred Chen]

[News] China’s DRAM Expansion Raises Concerns, Potentially Impacting Samsung and SK hynix Profits | TrendForce Insights

According to a report from Korean media ZDNet Korea, Chinese memory manufacturers like CXMT (Changxin Memory Technologies) are aggressively expanding ...

www.trendforce.com

It was reported here that CXMT is even tackling 12nm DRAM. If that is true, the other players should definitely be worried.

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.

Checking a recent product's analysis by TechInsights, though, they still have low (1x-class) Gb/mm2: https://www.techinsights.com/blog/cxmt-cxdb6ccdm-ma-g3-8gb-lpddr4x-memory-floorplan-analysis

 

[jim_22222]

[News] China’s DRAM Expansion Raises Concerns, Potentially Impacting Samsung and SK hynix Profits | TrendForce Insights

According to a report from Korean media ZDNet Korea, Chinese memory manufacturers like CXMT (Changxin Memory Technologies) are aggressively expanding ...

www.trendforce.com

It was reported here that CXMT is even tackling 12nm DRAM. If that is true, the other players should definitely be worried.

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.

Checking a recent product's analysis by TechInsights, though, they still have low (1x-class) Gb/mm2: https://www.techinsights.com/blog/cxmt-cxdb6ccdm-ma-g3-8gb-lpddr4x-memory-floorplan-analysis

for most of non Koreans they are not worried.
they had been worrying about the triopoly for a long time instead.
you can see from the chart how much excessive profit they can generate on a crazy year like2018.

 

[samwilde]

CXMT is already selling LPDDR5 memory.

Products - CXMT

desc

www.cxmt.com

No DDR5 or LPDDR5X yet.

There is a severe lack of competition in the DRAM market so I would say the more the merrier.

 

[adramtech]

They are losing money on each chip but the government is brute-forcing their way into this industry by throwing tens of billions at it. What will they do if they progress to the point EUV is required?

 

[jim_22222]

They are losing money on each chip but the government is brute-forcing their way into this industry by throwing tens of billions at it. What will they do if they progress to the point EUV is required?

the math is simple,
if the dram price is ten percent lower. the whole china saves maybe twenty billion dollars per year.
over all its profitting.
it helps you indirect ly when you want to buy a new laptop or cellphone

 

[adramtech]

The global DRAM industry is ~$100B this year. China isn't coming close to saving that much on a 10 percent price reduction, maybe they save $3-4B, while they spend $10B per year on it. The more they make, the more they lose. Normal capitalism doesn't support this effort. It doesn't help me to have an entrant that, if allowed, will undercut the rest of the industry...and when competition is killed off we will have less competition and higher prices...and only government funded memory manufacturers.

 

[jim_22222]

The global DRAM industry is ~$100B this year. China isn't coming close to saving that much on a 10 percent price reduction, maybe they save $3-4B, while they spend $10B per year on it. The more they make, the more they lose. Normal capitalism doesn't support this effort. It doesn't help me to have an entrant that, if allowed, will undercut the rest of the industry...and when competition is killed off we will have less competition and higher prices...and only government funded memory manufacturers.

the whole world saved 50billion+ in2023.
china easily in the range of 20billion.
its helping the whole world to battle the triopoly. you can help em by donation or buy from them.

 

[adramtech]

Sir, that $50B reduction was primarily caused by Samsung's decision not to cut supply until several quarters after SK Hynix and Micron, along with sluggish sales. It was not caused by the "Others." Samsung since restructured their management team for the blunder that cost them $10B in memory chip losses last year. It's too soon to attribute a major memory cycle downturn to China.

 

[jim_22222]

Sir, that $50B reduction was primarily caused by Samsung's decision not to cut supply until several quarters after SK Hynix and Micron, along with sluggish sales. It was not caused by the "Others." Samsung since restructured their management team for the blunder that cost them $10B in memory chip losses last year. It's too soon to attribute a major memory cycle downturn to China.

the point is, the triopoly can make 50 billion extra if they want to.
they can raise the price and keep it there as long as they feel comfortable.

cxmt at least is one of the factors they need to worry.

this is business 101,

 

[adramtech]

the point is, the triopoly can make 50 billion extra if they want to.
they can raise the price and keep it there as long as they feel comfortable.

cxmt at least is one of the factors they need to worry.

this is business 101,

If the big 3 could really control prices they would. Who wouldn't want to make an extra $50B? Outside of HBM and leading node, they are primarily price takers, not price makers. CXMT will be able impact pricing by flooding a market, like China has with solar panels and would like to do with electric cars. CXMT will be losing money while they grow, but they don't care because it's all paid for. If they can scale their chips down to a good cost and make money or break even, then the other 3 have a huge problem. It would be sad to see Samsung and Hynix and Micron go out of business because a government is subsidizing market by flooding it. Korea and the US would probably be forced into subsidies. But what happens when CXMT needs EUV? Even DUV is under the gun now, so how long does this progress last?

 

[jim_22222]

If the big 3 could really control prices they would. Who wouldn't want to make an extra $50B? Outside of HBM and leading node, they are primarily price takers, not price makers. CXMT will be able impact pricing by flooding a market, like China has with solar panels and would like to do with electric cars. CXMT will be losing money while they grow, but they don't care because it's all paid for. If they can scale their chips down to a good cost and make money or break even, then the other 3 have a huge problem. It would be sad to see Samsung and Hynix and Micron go out of business because a government is subsidizing market by flooding it. Korea and the US would probably be forced into subsidies. But what happens when CXMT needs EUV? Even DUV is under the gun now, so how long does this progress last?

this thing is quite complicated, but it's not what you described.

I am not going to write details here for free.
you can can keep complaining and found not many people cares.

 

[adramtech]

strange reply

 

[Barnsley]

the math is simple,
if the dram price is ten percent lower. the whole china saves maybe twenty billion dollars per year.
over all its profitting.
it helps you indirect ly when you want to buy a new laptop or cellphone

What about the poor folk working for companies that get replaced by a Govt backed entity?

 

[tooLongInEDA]

the point is, the triopoly can make 50 billion extra if they want to.
they can raise the price and keep it there as long as they feel comfortable.

cxmt at least is one of the factors they need to worry.

this is business 101,

It is "business 101" that some industries consolidate like this. Especially in very complex and technical areas demanding a large capital spend. Look at the commercial aircraft industry (Boeing, Airbus) or large jet aero engines (GE, Rolls-Royce).

There are no "excess profits" here. There are high profits in good years and losses in bad ones. That's always been the case in DRAM.

From time to time, outsiders have come along and thought "that looks like easy money, we've got some spare capital, let's have a go". I remember some Japanese steel companies paying TI to build them DRAM fabs in the 1990s. It didn't last.

I think we've got far bigger problems around today than worrying about Samsung/Hynix/Micron's DRAM profits. And if you're looking for excess profits around memory, perhaps iPhones are a good place to look first.

 

[Fred Chen]

Credit: AFP

With strong backing from the Chinese government, Changxin Memory Technologies (CXMT) is aggressively expanding its DRAM production capacity, potentially challenging the triopoly led by Samsung Electronics, SK Hynix, and Micron.

CXMT has steadily increased its production capacity each year, supported by government subsidies, according to reports from Newsis and Bloter, citing Nomura Securities. The company's output grew from 120,000 wafers per month at the end of 2023 to 160,000 in the first quarter of 2024 and is projected to reach 200,000 by year-end, representing 11% of global DRAM production.

Nomura Securities predicts that if CXMT expands its DRAM production capacity as planned, it will account for 15% of the global DRAM market. In terms of production volume alone, it would become the world's fourth-largest DRAM manufacturer after Micron.

CXMT's rapid expansion could challenge the Big Three's dominance in the DRAM market, which has been established since the early 2010s. However, with a global market share of under 1% and a focus on older products like DDR4 and LPDDR4, CXMT remains two to four years behind in cutting-edge technologies such as HBM3E, DDR5, and LPDDR5X, according to analysts.

In February, Nikkei reported that CXMT is working to develop its first domestically-made high bandwidth memory (HBM) in response to increasing US export controls. The report indicated that CXMT had placed orders with US and Japanese suppliers for equipment needed for HBM production, which is not yet restricted by export controls.

In March, Bloomberg reported that the US is considering adding six Chinese companies, including CXMT, to its trade blacklist, as part of a broader effort to restrict China's development of advanced semiconductors. CXMT said the company complies with US export regulations and supports fair competition, emphasizing that its products are primarily used in everyday consumer goods, underscoring its focus on civilian and commercial applications.

View attachment 2306

Source: IDC, September 2024

China-based CXMT's aggressive production expansion may disrupt global DRAM market

With strong backing from the Chinese government, Changxin Memory Technologies (CXMT) is aggressively expanding its DRAM production capacity, potentially challenging the triopoly led by Samsung Electronics, SK Hynix, and Micron.

www.digitimes.com

CXMT's expansion is in lagging nodes, so maybe it won't impact the triopoly. China would have to stop buying from the triopoly at leading nodes for there to be an impact.

 

[jim_22222]

It is "business 101" that some industries consolidate like this. Especially in very complex and technical areas demanding a large capital spend. Look at the commercial aircraft industry (Boeing, Airbus) or large jet aero engines (GE, Rolls-Royce).

There are no "excess profits" here. There are high profits in good years and losses in bad ones. That's always been the case in DRAM.

From time to time, outsiders have come along and thought "that looks like easy money, we've got some spare capital, let's have a go". I remember some Japanese steel companies paying TI to build them DRAM fabs in the 1990s. It didn't last.

I think we've got far bigger problems around today than worrying about Samsung/Hynix/Micron's DRAM profits. And if you're looking for excess profits around memory, perhaps iPhones are a good place to look first.

they were caught with conspiracy in price fixing multiple times.
don't be so innocent.

 

[adramtech]

they were caught with conspiracy in price fixing multiple times.
don't be so innocent.

Yet all but three went under or got out of the business. Now when DRAM prices rise they get sued. They know they are under a microscope.

 

[hist78]

the whole world saved 50billion+ in2023.
china easily in the range of 20billion.
its helping the whole world to battle the triopoly. you can help em by donation or buy from them.

View attachment 2308

The graph you provided is for revenue, not profit.

 

[jim_22222]

The graph you provided is for revenue, not profit.

you think 2018 they produced twice as many wafers as 2016?