China's CXMT to start AI memory production amid low HBM3E yields

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CXMT launches AI memory production

Highlights

CXMT will begin limited HBM3E memory production within two months with low yields of 20–30%, compared to SK Hynix's 70%.
CXMT's HBM3E costs exceed overseas peers due to low yields, and chip performance trails SK Hynix’s current generation, intensifying competitive pressure.
CNXMT, holding 10% global DRAM revenue, faces export controls and tech gaps as SK Hynix, Samsung, and Micron dominate HBM revenue at 50%, 33%, and 18% respectively.

HBM3E rollout faces manufacturing constraints

As reported by Reuters, ChangXin Memory Technologies, China's largest DRAM maker, has sent HBM3E samples to several domestic AI chip designers and expects to begin limited production over the next two months, according to two people familiar with the matter.

Those people said yields, or the proportion of chips meeting specifications, are only about 20% to 30%. That compares with yields of around 70% at South Korea's SK Hynix, the market leader in high-bandwidth memory.

CXMT is pressing ahead because Chinese AI chipmakers are struggling to secure enough advanced memory to raise output. Low yields make production costly because a large share of chips must be discarded or reworked, and one of the people said CXMT's HBM3E is expected to cost more than comparable overseas products.

The company began developing the technology internally as early as 2024, the people said. In testing, one person said CXMT's HBM3E performed closer to SK Hynix's previous-generation HBM3 than to its current HBM3E products, and the company has sent customers both a standard version and an updated design intended to improve yields.

China's AI chip supply gap widens competitive pressure

High-bandwidth memory is built by stacking memory chips vertically so they can rapidly exchange data with AI processors, making it a critical component for training and running large language models.

Washington tightened export controls on certain advanced HBM products bound for China in December 2024. The people said Chinese chipmakers have increasingly turned to unofficial channels for supply, where prices can run several times higher.

The production challenge underscores the gap between CXMT and established leaders including SK Hynix, Samsung Electronics and Micron Technology, which dominate global HBM supply. According to Counterpoint Research, SK Hynix held 50% of global HBM revenue in the second quarter, followed by Samsung with 33% and Micron with 18%, with most revenue coming from HBM3E.

Counterpoint also said CXMT held a 10% share of global DRAM revenue in the quarter, making it the world's fourth-largest supplier of conventional memory chips. But U.S. export controls are limiting its access to some of the most advanced chipmaking equipment, making it harder to narrow the technology gap, while Samsung said in July that it had expanded HBM4 sales and shipped HBM4E samples to major customers.

In our earlier article on Micron Technology shares losing momentum after a sharp rally, we highlighted a bearish weekly-chart breakdown that pointed to a possible pullback if key resistance levels were not reclaimed. We also noted weakening RSI and MACD signals and outlined the main support and resistance zones investors were watching as the stock’s AI-driven gains faced a technical test.

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