China's DRAM Tech Push Challenges Samsung, SK Hynix Profitability

Chinese memory semiconductor companies are rushing to launch server-grade DDR5 memory and develop next-generation 3D DRAM, threatening the high profitability of Korean firms.

China's largest DRAM manufacturer, Changxin Memory Technologies (CXMT), has narrowed the technology gap and succeeded in mass-producing server DDR5. Its revenue grew significantly last year, signaling a shift in the profit structure of the Korean semiconductor industry.

Yangtze Memory Technologies (YMTC), leveraging its strength in NAND flash, is pursuing entry into the DRAM market and making large-scale facility investments, aiming to transform into a comprehensive memory company. YMTC plans to submit its IPO application in June. According to Wuhan City's major project plan for 2026, investments totaling $38 billion are slated for the memory and storage sectors, primarily driven by YMTC and XMC. YMTC is currently installing and verifying equipment for its third plant, targeting operation by the end of 2026, and has commenced pilot production of 25,000 wafers per month. The company plans to expand its DRAM production capacity from the current 50,000 to up to 100,000 wafers per month in the future.

Chinese companies face limitations due to restrictions on acquiring extreme ultraviolet (EUV) lithography equipment. Investors are currently closely watching the speed of facility investment execution by Chinese listed companies, the actual operational start dates of new fabs, changes in the actual adoption rate of Chinese-made DDR5 DRAM in the global server market, and whether Samsung Electronics and SK Hynix can maintain their lead in developing next-generation premium products.