CXMT has been offering DDR4 chips at about half the prevailing market rate

CXMT halves DDR4 prices as YMTC gains ground in NAND, raising concerns over Korea’s legacy exposure

Samsung Electronics and SK hynix are locked in a race to mass-produce sixth-generation high-bandwidth memory, but Chinese rivals are making gains elsewhere — flooding the legacy DRAM market with chips priced at roughly half the going rate.

According to industry sources on Friday, China’s top DRAM manufacturer CXMT has been offering older-generation DDR4 chips at about half the prevailing market rate. The move comes as global supply shortages have driven prices sharply higher, allowing the company to aggressively push legacy products for mobile devices and PCs in a bid to boost market share.

DDR4 remains a mainstay component in devices such as PCs and TVs, and have risen in price recently.

Data from DRAMeXchange showed that as of end-January, the average fixed contract price of PC DRAM DDR4 8Gb stood at $11.50, up 23.7 percent from $9.30 a month ago. Compared with $1.35 a year earlier, the price has jumped more than eightfold. DRAM prices have climbed for 10 consecutive months, marking the highest level since the market tracker began compiling data in June 2016.

Against this backdrop, cut-price Chinese chips are proving tempting. US hardware firms HP and Dell are reportedly conducting quality tests on CXMT’s DRAM, while Taiwan’s Asus and Acer have sought cooperation with Chinese partners. Signs are emerging that aggressive pricing is translating into demand.

“Chinese firms are waging a volume-based strategy starting with general-purpose memory, backed by state subsidies and domestic demand from AI servers and locally developed GPUs,” said an industry source who requested anonymity. “As Korean companies concentrate on HBM4, there are visible cracks emerging in (their hold on) the legacy market.”

The challenge for Korean chipmakers is that the legacy segment still accounts for a significant portion of their earnings. More than half of the total DRAM production capacity at both Samsung and SK hynix is understood to be allocated to general-purpose products. Even if they maintain leadership in HBM4, a deepening erosion of the mainstream market could eventually weigh on profitability.

Chinese players, meanwhile, are not limiting their push to low-cost volume sales. The cash and know-how gained from legacy chips is funding a push into higher-end products.

CXMT is in the process of converting wafer capacity equivalent to about 20 percent of its total DRAM output — some 60,000 wafers per month — at its Shanghai plant to the fourth-generation HBM3 chip production. The possibility of expanding into post-HBM3E products is also being discussed.

The Shanghai facility is believed to have production capacity two to three times larger than the company’s headquarters plant in Hefei. Equipment installation is expected to be completed in the second half of this year, with mass production slated for next year. Although HBM3 and the fifth-generation HBM3E chips trail HBM4 in performance, they remain widely used in AI data centers.

China’s advance is not confined to DRAM. YMTC has been gaining traction in the NAND flash sector as well, capitalizing on competitively priced mobile products. The company recorded a 10 percent share of the global NAND market for the first time last year, and momentum is widely expected to continue.

YMTC is currently building a third fabrication plant in Wuhan, targeting operations next year. Half of the facility’s production capacity is to be allocated to DRAM. It will initially focus on legacy DRAM products, with the possibility of expanding into HBM production in partnership with local assembly firms. Industry sources say the pattern is familiar — build scale in legacy DRAM, then move up the value chain.

“At this stage, Chinese manufacturers are relying on aggressive pricing to build scale in legacy DRAM,” the anonymous source said. “But over time, the technology gap may narrow more quickly than expected. Even if Korean firms maintain leadership in HBM, neglecting the mainstream segment could weigh on profitability in the longer run.”