China’s CXMT begins HBM3E production as chip battle with Korean powerhouses widens

China's largest dynamic random-access memory (DRAM) maker, CXMT, has begun small-scale production of fifth-generation high bandwidth memory (HBM) broadening the front line in the chip battle with Samsung Electronics and SK hynix from conventional DRAM to the fast-growing market for advanced memory used in AI chips.

CXMT has begun producing HBM3E for AI accelerators and aims to ramp up production next year, U.S. technology outlet The Information reported Monday, citing multiple sources.

The chipmaker is targeting Chinese customers. T-Head, Alibaba's chip design subsidiary, and the Chinese AI chipmaker Cambricon are reportedly testing CXMT's HBM3E for their AI accelerators. If the chips pass final validation, they could be used in commercial products as early as next year.

HBM3E is used in many of today's widely deployed AI accelerators, including Nvidia's H200 and Blackwell products. The memory industry's three largest players — Samsung, SK hynix and Micron — are already mass-producing sixth-generation HBM4, one generation ahead.

While CXMT remains a generation behind, it has been expanding its product portfolio beyond conventional DRAM to include LPDDR6, the next generation of low-power mobile DRAM, as well as HBM3E.

Strong domestic demand is helping drive CXMT's push into advanced memory. U.S. semiconductor export restrictions have made it difficult for Chinese companies to procure cutting-edge HBM, which has led the country's AI chipmakers to increase their use of domestically produced components. That gives Chinese-made HBM a ready market even if its performance falls short of products from industry leaders.

CXMT, however, still trails the leading memory makers by a wide margin in its ability to mass-produce HBM.

It is estimated that the company's front-end yield for its previous-generation eight-layer HBM3 was about 35 percent, while its back-end yield was about 70 percent, resulting in an overall yield of roughly 25 percent, according to semiconductor research firm SemiAnalysis in June.

It estimated that yields would be even lower for products that are more difficult to stack, such as 12-layer HBM3 and 12-layer HBM3E.

Despite the setback, CXMT has rapidly expanded amid a boom in the memory chip market. Revenue in the first half of this year surged 874 percent from a year earlier to 150.3 billion yuan ($22.4 billion), while net profit swung into the black at 77.6 billion yuan.

The company raised about 12 trillion won through a listing on Shanghai's STAR Market — a Chinese equities market focused on science and technology listings — in July. CXMT is also set to supply LPDDR6 for Xiaomi's new foldable smartphone, the 18 Fold, which is scheduled to launch this month.

BY KIM IN-KYOUNG, LEE YOUNG-KEUN [[email protected]]