China's leading DRAM maker, CXMT, plans to start limited production of HBM3E high-bandwidth memory chips critical for AI processors, despite yields as low as 20%. This marks a strategic push to address domestic memory shortages amid US export controls.
- CXMT’s HBM3E yields estimated at 20-30%, far below SK Hynix’s 70%.
- Limited production to start within two months to supply Chinese AI chip firms.
- Technological and export constraints widen China’s gap in advanced AI memory.
What happened
ChangXin Memory Technologies (CXMT), China’s largest DRAM manufacturer, is advancing into production of HBM3E, a sophisticated high-bandwidth memory type vital for AI processors. Despite yield rates — the percentage of chips meeting specifications — being as low as 20-30%, CXMT is moving forward to ease the acute shortage of these memory chips domestically.
Samples of this HBM3E product have been distributed to various Chinese AI chip design companies, with limited volume production expected to start in the next two months. The initiative is occurring under intense pressure due to US export curbs that restrict China’s access to foreign high-end chipmaking equipment and technology.
Why it matters
HBM3E memory is crucial for training and running AI models because it allows rapid data exchange with processors. CXMT’s move reflects a strategic government-backed effort to develop domestic AI hardware alternatives to market leaders like Nvidia amid tightening US restrictions on chip imports.
However, CXMT’s significantly lower yield rates compared to South Korean competitor SK Hynix, which achieves about 70% yield, expose the technological gap. Low yields not only raise production costs but also risk limiting supply, exacerbating challenges for Chinese AI chip firms that are already facing constraints in acquiring advanced memory through unofficial channels at high prices.
What to watch next
Industry observers will monitor CXMT’s ability to improve yield rates and scale up HBM3E production efficiently, which will be critical in reducing China’s dependency on foreign high-bandwidth memory. Success or failure will significantly impact the competitiveness of Chinese AI chipmakers such as Huawei, Cambricon, MetaX, and Iluvatar CoreX.
Additionally, developments in US export policy and potential technological innovations at CXMT may alter the dynamics of the global AI chip market. With competitors like Samsung already advancing to HBM4 and HBM4E generations, China faces mounting pressure to catch up in next-generation memory technologies.