The electric vehicle boom has accelerated Silicon Carbide (SiC) technology development, with Chinese firms playing significant roles.
A report from French research firm Knowmade has revealed substantial progress made by Chinese companies, which are increasingly noted as key innovators within the semiconductor space. This is particularly evident as Changxin Memory Technologies (CXMT), one of the leading manufacturers of dynamic random access memory (DRAM), positions itself to gain considerable market share globally.
According to estimates by Gou Jiazhang, general manager of Silicon Motion Technology—a prominent developer of solid-state drive (SSD) controllers—CXMT could climb to capture as much as 15% of the global memory market within the next few years. This would represent a dramatic shift from just three years ago when CXMT's share was less than 2%. Following significant scaling of its production capacity and advancements in memory technology, CXMT's market share is predicted to reach 10% as early as 2024 due to increasing production capabilities of DDR4 and DDR5 memory.
Specific data indicates CXMT increased its wafer starts per month from 70,000 in 2022 to 120,000 by 2023, with projections to reach 200,000 by 2024. Such ramp-up suggests the company is not only capable of meeting growing domestic demand, but also of challenging established players like Samsung, SK hynix, and Micron—companies currently dominating the DRAM market with shares of 42.9%, 34.5%, and 19.6%, respectively.
Interestingly, CXMT appears to be securing lucrative supply contracts with companies such as Xiaomi and Transsion, which facilitate access to about 20% of the global smartphone market. This bodes well for CXMT's prospects as it now has strong partnerships within one of the most competitive tech landscapes.
Despite this, CXMT faces significant hurdles due to existing sanctions imposed by the U.S. and the Netherlands, which could hinder its ability to saturate the global market. Compounding these challenges is the reality of focusing heavily on domestic demands, especially among government-controlled entities, which could prevent CXMT from exporting aggressively.
Adding another layer of complexity, reports indicate CXMT and Fujian Jinhua have been unloading DDR4 memory at discounted rates—around 50% lower than typical market prices— which has pressured major competitors to rethink their production strategies for DDR4 chips. With CXMT reported to be producing DDR5 at scale, observers now wonder whether it will adopt similar practices to undercut competition or whether it will rationalize pricing to maximize profitability.
The competitive entry of CXMT within the DDR5 market may significantly alter the status quo. If the company achieves substantial market penetration, it may be necessary to venture beyond Chinese consumers to sustain growth. Yet, even if CXMT can effectively outpace competitors like Micron and Samsung domestically, those rivals may seek to redirect their production efforts elsewhere, ensuring steady supply levels globally.
This potential redistribution could benefit consumers through decreased prices, but simultaneously pose risks of instabilizing the DRAM market which has historically circumvented aggressive price wars. That said, CXMT’s ascendance might spur suppliers like Micron, Samsung, and SK hynix to intensify focus on enterprise markets, reducing their exposure to competition from CXMT.
While CXMT has made undeniable strides within the consumer electronics segment, its presence within enterprise markets remains firmly restricted. Server manufacturers, both domestic and foreign, are less inclined to partner with nascent producers, pushing established suppliers to double down and bolster their offerings in this domain.
Moving forward, CXMT's future strategies and their impact on global memory pricing and market health remain closely monitored. The effects of this emergent Chinese semiconductor player could dictate the industry's contours for years to come, heralding shifts not only for production strategies but compelling established manufacturers to reconsider their approaches to pricing and product offerings.
According to Anton Shilov, contributing writer at Tom's Hardware, "CXMT's growth highlights the growing influence of Chinese manufacturers... and poses direct challenges to established industry leaders." This sentiment was echoed by industry watchers, reflecting both concerns and commendations for how the DRAM market might evolve.
