ChangXin Memory Technologies, China's flagship memory chipmaker, has captured 10% of the global DRAM market, a milestone widely read as evidence that Beijing's semiconductor push has begun to bear fruit. Backed by massive state support and a vast domestic market, the company has turned the memory shortage driven by the spread of artificial intelligence into an opening.
The greater threat is CXMT's recent aggressive expansion plans, which are accelerating its output growth. The company, whose monthly capacity is estimated at about 300,000 wafers, is adding production lines centered on Hebei, Shanghai and Beijing. Monthly wafer capacity is expected to rise by more than 250,000 by 2028, bringing total capacity to as much as 550,000 to 600,000 wafers. That approaches SK hynix's monthly output this year of roughly 590,000 wafers.
Yangtze Memory Technologies, which accounted for 14% of global NAND shipments in the second quarter and entered the global top three for the first time, also plans to enter the DRAM market next year. Some expect YMTC, which is preparing for a listing, to move up its DRAM production plans at its Phase 3 fab in Wuhan and begin mass production this year. Chinese firms that have broken through the 10% share barrier in global DRAM are rapidly eroding the dominance of Samsung Electronics and SK hynix.
Chinese chipmakers are also advancing quickly in technology. CXMT plans to begin mass production of fifth-generation high-bandwidth memory, HBM3E, this year. Big Tech firms are set to adopt HBM4 from Samsung Electronics and SK hynix in their flagship AI servers starting in the second half, meaning China has caught up to within one generation. Industry watchers say the technology gap with Korean firms has narrowed from more than five years in the past to two or three years. CXMT has also disclosed plans to mass-produce LPDDR6, the next-generation mobile DRAM, signaling head-to-head competition with Samsung and SK in leading-edge commodity DRAM.
Under its self-sufficiency strategy, China is also building an independent supply chain in equipment. The China Electronic Production Equipment Industry Association held CSEAC 2026, a semiconductor equipment trade show, in Wuxi from the 31st of last month through the 2nd of this month, according to industry sources. Participants included Shanghai Micro Electronics Equipment, a lithography specialist, along with Naura, AMEC, Piotech and Kingsemi, which supply etching, deposition and cleaning tools. Exhibits extended to ultra-precision components that control wafers at the nanometer scale, or one-billionth of a meter. "What has changed most from the past is that a structure has formed in which equipment and component makers grow together and pull technology upward," an industry official said.
In response to China's push, Samsung and SK are also pouring resources into capacity expansion. SK hynix moved up the completion of its Yongin semiconductor cluster by 12 years, and Samsung Electronics set 2029 as its target for starting operations at the Yongin national industrial complex, two years earlier than planned. Both companies plan to begin fab construction at the Honam cluster as soon as conditions allow. It is the same strategy they used to defend market leadership through aggressive expansion each time a new industry emerged, from information technology in the early 2000s to mobile in the 2010s.
But with the United States and Japan actively competing to attract memory fabs, seen as core infrastructure for the AI industry, the expansion strategies of Samsung and SK could be upended. U.S. Commerce Secretary Howard Lutnick, referring to semiconductor tariffs on the 2nd, said the policy was designed to make companies prepared to pay a price, in the form of tariffs, to enter what he called the world's greatest market. If the United States, home to the Big Tech firms that are memory's largest customers, imposes tariffs, Korean companies will have little choice but to consider local production.
Japan has offered striking incentives, pledging to cut the total cost of ownership, including construction and operating funds, to about half the level in Korea if a chipmaker builds a plant there. Its ecosystem of materials, components and equipment suppliers is also formidable, to the point that SK Group Chairman Chey Tae-won has said on several occasions that the group is reviewing building a semiconductor plant in Japan.
That has raised concerns that Honam fab construction by Samsung Electronics and SK hynix could be pushed down the priority list. The industry expects capacity at China's CXMT and U.S.-based Micron each to double from current levels by 2028, which could ease the memory shortage. In that case, incentives for Korean firms facing shrinking market share to invest further would inevitably weaken.
Moon Kook-chul, a professor of electronic engineering at Sunchon National University, said U.S. targeted tariffs could make it a reality for Korean companies to build plants there. "Japan will try to attract global equipment makers along with memory fabs to build out the DRAM infrastructure it has lacked," he said.
