China’s influence in the memory market is expected to grow for both buyers and suppliers. The extent of this influence will depend on the new demand environment shaped by Gen AI, technological changes, and the US-China regulations.
How Big is ‘Made in China’ Memory?
Made in China DRAM: Chinese DRAM manufacturer CXMT is projected to account for 13% of the global capacity, 6% of shipments, and 3.7% of revenue in 2024. By 2025, its capacity is expected to grow to a level similar to that of Micron, the third-largest DRAM manufacturer in the US. The lower production and revenue compared to capacity is due to lagging technology, low yield rates, and pricing. However, this gap is expected to narrow.
42% Less Bit Production per Wafer: Chinese semiconductor manufacturer CXMT was estimated to produce 42% fewer bits per wafer in 2024 compared to competitors. This gap could be reduced to 32% by 2025. However, CXMT needs to successfully implement HKMG to improve power consumption and speed. While the yield rate for LPDDR4 is around 80%, the yield rate for the company’s strategic product DDR5 in 2025 has not yet exceeded 50%.
New Opportunities and US Regulations: CXMT has entered the mobile market, which requires low-power processes, leveraging the Chinese market. The expansion of AI in electric vehicles could be a new opportunity for China. Due to US equipment regulations, China is working to close the gap with game-changers like 3D technology or by localizing key parts and materials. However, the localization of equipment, which is expected to expand over the next 1-2 years, will be a challenging endeavor.
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Author
MS Hwang
MS Hwang is a research director at Counterpoint, specializing in memory semiconductor research. MS Hwang brings over 30 years of experience from Samsung Electronics and sell-side brokerage research roles including ABN AMRO, Goldman Sachs, Credit Suisse and Samsung Securities.
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