"Chinese DRAM manufacturer CXMT records 5% market share last year"

There are foreign media reports that Chinese DRAM manufacturer Changxin Memory Technology (CXMT) recorded a 5% share of the DRAM market last year.



This is an analysis that Chinese companies are growing rapidly in the DRAM market, where Samsung Electronics and SK Hynix from Korea and Micron Technology from the US have a combined market share of about 96%.



Changxin Memory Technology (CXMT) 'LPDDR5' product image. [Photo = CXMT homepage]



Citing data from Chinese consulting firm Qianzhan, the Financial Times (FT) reported on the 10th (local time) that CXMT's market share in the $90 billion (approximately 130 trillion won) DRAM market was close to zero in 2020, but increased to 5% last year.



The DRAM market has been dominated by Samsung Electronics and SK Hynix from Korea and Micron from the US, with the sales of these three companies accounting for about 96% in 2023.



In an interview with the FT, Jeong Chang-won, co-head of Nomura Asia Research, said, "With the rise of CXMT, Korean semiconductor companies are facing a new reality where Chinese products are overflowing in the low-end market," adding, "This is not a matter of technological superiority, but of quantity, and Samsung in particular has been hit by oversupply and falling semiconductor prices."



When CXMT was founded in 2016, it had almost no DRAM production capacity of its own, but in 2019, with investment from Chinese conglomerates such as Alibaba and the Chinese government, it began mass producing DDR4, which was the latest DRAM product at the time.



Nomura explained that CXMT is also aggressively increasing DDR4 production, and its wafer production capacity has increased from 70,000 sheets per month in 2022 to 200,000 sheets per month as of the end of last year. This is about 15% of the global DRAM market.



As the price of old DRAMs has fallen due to China's quantity offensive, the profit margins of Samsung Electronics and SK Hynix have decreased, and ultimately, the two companies are reducing their share of the low-end market, the FT pointed out.



Dan Hutchison, vice president of research firm TechInsights, said that CXMT's market share is still relatively small and its large proportion of the Chinese market is creating a "snowball effect" with its rapid growth.



"As market share grows, production increases and yields increase. Costs go down and market share grows again," he said. "This is exactly how Korea pushed out Japan in the memory sector in the 1980s and 1990s, and now a similar thing is starting to happen to Korea."



Chinese consulting firm Qianzan also predicted that CXMT's DRAM market growth will rapidly "snowball."



CXTM is also focusing on the development of high-bandwidth memory (HBM) used in the AI ​​field. This is because related investments have continued following the announcement of the AI ​​model by Chinese startup DeepSec. The plan is for CXTM to supply the HBM needed to build AI data centers in China.





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