Key points
- CXMT is moving into NAND flash memory
- Its Chinese rival YMTC is moving into DRAM
- Samsung and SK Hynix now face China in both
On September 18, Reuters reported that China's CXMT is preparing to make NAND flash memory for the first time. The company already makes DRAM, the other main kind of memory chip, so the plan would push CXMT into a second big market, one that Samsung and SK Hynix lead.
CXMT plans to set up a research and production line for NAND at a new plant in Beijing, and the company has started a separate research center in the city for the same work, according to the report. CXMT is already talking to possible buyers, including a startup that wants the chips for storage inside AI systems and supercomputers. There's no date yet for when the NAND would go on sale, and the report says it isn't clear the plan will reach mass production.
The other half of the shortage
AI servers have created a memory shortage that the industry expects to last into 2027. Chasing the best prices, the big makers have shifted more of their factories to DRAM and to high bandwidth memory, the type that sits beside AI chips. That's left less room for NAND, the memory that stores data, and its price has moved up. CXMT would be arriving just as NAND buyers are paying more.
Most of that story so far has been about DRAM and HBM. NAND is the quieter half, and it's the half CXMT never made until now.
The two Chinese makers are crossing over
There's a second move behind this one. YMTC, the other big Chinese memory maker, spent years building NAND, while CXMT built its business in DRAM. The two mostly stayed out of each other's way. That's changing. This year YMTC started sending low power DRAM samples to some customers, a step onto CXMT's ground, and now CXMT is stepping onto YMTC's. Korean coverage calls the two China's "twin stars," and the line between their markets is starting to blur.
The question for Korea is what this does to NAND, where Samsung and SK Hynix still lead. In the second quarter Samsung held about 28 percent of NAND by revenue and SK Hynix about 20 percent, Economy Tribune (이코노미트리뷴) reported. YMTC was near 14 percent and had already passed Japan's Kioxia by shipments. CXMT isn't on that list yet, and the company may not be for years. Its NAND is still in the lab, and a NAND business is hard and slow to build.
CXMT is taken seriously because of how fast the company grew in DRAM. Its share of that market rose to about 9.5 percent in the second quarter from 7.6 percent in the first, Joong Ang Economy News (중앙이코노미뉴스) reported. Samsung still led DRAM at about 39 percent and SK Hynix at about 25 percent. That rise is why CXMT's move into NAND will draw attention from Samsung and SK Hynix. Samsung and SK Hynix are answering with capacity of their own, a planned expansion that on the Bank of Korea's numbers is larger than CXMT's entire projected output. SK Hynix's NAND unit Solidigm is also weighing its first US plant.
One industry source quoted by Joong Ang Economy News played down the immediate danger. "CXMT's move into NAND should be seen less as an immediate threat to Samsung and SK Hynix's market position, and more as a sign that China is widening its strategy to grow DRAM and NAND at the same time," the source said.
CXMT hasn't behaved like a company trying to win on price. Its factories are booked, and this year the company quoted Apple more than Samsung and SK Hynix when Apple asked for a discount. Economy Tribune reported that CXMT has also raised the prices charged to Huawei and turned down Huawei's request for relief. So its NAND, if it arrives, may not be the cheap supply some people expect. A sold out DRAM maker moving into NAND is looking for more customers, not a price fight.
None of this changes the near term. CXMT is entering NAND from behind, and for now the company is entering a lab, not the market. YMTC's own move into DRAM is at the sample stage too. What the day showed is a direction, that China now wants to build both kinds of memory at once, more than a finished threat. For a fuller look at China's NAND push, see how YMTC is raising billions to chase Samsung and SK Hynix in flash.
Some quotes and figures are translated from Korean-language reporting.
