Chinese memory manufacturers are likely to massively expand market share by 2027

The two Chinese companies Yangtze Memory Technologies Co. (YMTC) and ChangXin Memory Technologies (CXMT) are already among the ten largest memory manufacturers worldwide, although this is largely attributed to China's domestic market. However, according to market researchers, aggressive pricing and the planned expansion of production capacities this year are also likely to lead to growing market shares internationally.

This had already become apparent at the beginning of this year, as some well-known PC manufacturers are considering using Chinese memory due to the memory crisis. To cushion the supply shortage, HP, Dell, Acer and Asus are reportedly already certifying DRAM from China in part. So far, YMTC and CXMT have primarily supplied domestic companies, as Beijing subsidizes Chinese companies when they use locally produced chips, for example for smartphones.

"Chinese manufacturers often enjoy a price advantage of more than 15 per cent for products of the same specifications, which is highly attractive to the price-sensitive general-purpose server and consumer markets," explains Arisa Liu from the Taiwanese Institute of Economic Research, according to the South China Morning Post. However, it is not only because of this price advantage that Chinese memory manufacturers are becoming increasingly interesting for international companies, but also because of the available capacities, which many memory manufacturers lack due to the currently enormous demand.

YMTC and CXMT increase wafer production 2026

YMTC is set to begin mass production of modern NAND chips for flash memory such as SSDs in its chip factory in Wuhan, Hubei Province, China, in the second half of this year, according to the South Korean newspaper Chosun. With the expansion of these NAND capacities, YMTC would overtake Korean manufacturer SK Hynix and US company Micron to become the third-largest NAND manufacturer worldwide, behind Kioxia from Japan and Samsung Electronics from Korea.

Meanwhile, CXMT plans to invest the equivalent of 1.1 billion US dollars in the "technical upgrade for mass production lines of memory wafers", as the Chinese company already applied for in December. At the same time, "CXMT is targeting mass production of AI-specific semiconductors, such as high-bandwidth memory, in Shanghai by the year-end," explains MS Hwang from the market research company Counterpoint Research.

Impact on the memory market likely not until 2027

However, Hwang also estimates that the price difference between Chinese memory and the global average price is shrinking. He attributes the growing market shares less to price advantages and more to the fact that Chinese manufacturers "have the volume that others lack". The Swiss bank UBS estimates the expansion of Chinese memory capacities for this year at around 120,000 to 140,000 wafers per month, with this figure expected to increase further in 2027.

However, market researcher Arisa Liu does not expect an immediate end to the memory crisis, as it usually takes 9 to 12 months for an expansion of memory capacities to affect the market. An improvement in chip yield is therefore the decisive factor. "Judging by the expansion progress of CXMT and YMTC, the production lines launched in the second half of this year are not expected to have a significant impact on the global supply-demand balance until 2027," Liu added.

(fds)