The memory shortage has become so severe that consumers are now looking to Chinese suppliers like CXMT and YMTC as their 'saviour', hoping to get cheap DDR5/DDR4 modules, but that might never be the case.
The retail situation in the RAM market is worsening by the day, with price hikes across the board, especially for higher-capacity modules. Mainly driven by DRAM shortages, it has become tough for gamers to access any memory, and given that the supply situation isn't looking to improve anytime soon, many of us have set our hopes on Chinese memory manufacturers coming to the rescue. Consumers believe that CXMT and others will keep module pricing viable enough to ensure large-scale adoption, but they are wrong for several reasons.
In this report, we'll mainly discuss two key aspects. The first is a rundown of China's memory industry, and the second is about whether CXMT, YMTC, and similar players could actually work around regulatory frameworks to ship DDR modules to customers worldwide. Talking about supply chain elements, the first and foremost is volume. And before we dive into volume, it's important to take a look at how CXMT produces DDR5/DDR4 modules and the process technologies behind them.
CXMT's DDR5 Modules: How an EUV Workaround Delivers a Decent Solution That Isn't Feasible at Volume
CXMT is one of the leading companies producing DDR5 modules in China, so we will focus on the company. It's important to note that DDR5 requires process nodes built with EUV lithography, and, as you might have guessed by now, China doesn't have access to the equipment needed. Instead, CXMT uses workarounds to achieve similar results, and while I won't go into much detail on the technicals, notable techniques include SAQP, aggressive binning, and higher XMP voltage profiles.
Overall, one of the more important points to note is that CXMT's die size is reported to be around 40-50% larger for the same memory capacity compared to SK hynix, which puts the manufacturer at a cost disadvantage. If you get fewer chips from a silicon wafer, the cost increases dramatically once CXMT moves to volume, and this is where the Chinese manufacturer is at a severe disadvantage.
And to achieve speeds up to 8,000 MT/s, CXMT's binning techniques do increase kit temperatures compared to alternatives. When you talk about memory adoption specifically, it isn't just purchasing them and then welding them into the main silicon; rather, it is a multi-stage process that involves design validation, testing, and eventually integration. CXMT currently lacks all these elements, as the company is newer to the market with its DDR5 solutions.
It would be very difficult for CXMT become a global memory company without experience in resolving technical defects with customers in various application fields such as CPUs and mobile graphics. Given that we already have proven suppliers like Samsung and SK Hynix, there is no reason to choose a company without a history of quality and reliability.
- Professor Shim, Dong-A University via KoreaHerald
From a business and manufacturing standpoint, Chinese vendors cannot ramp up volume production of DDR5 chips without encountering financial and adoption challenges And when you look at China's domestic demand, CXMT's capacity currently serves the region alone, and even if the company scales up production dramatically, vendors like Apple, HP, and Dell still won't approach buying modules unless they've extensively tested the technology itself.
CXMT has denied the claims of selling RAM kits at pricing lower than what retail offers, and according to a report by DigiTimes, the manufacturer is now looking to scale up prices towards levels similar to what Korean vendors are offering, which means that there isn't an exclusive discount on CXMT's memory modules at all. Similarly, YMTC, the famous Chinese NAND manufacturer, is also investing in DRAM production lines, yet there are no reports of underpricing the current DDR5/DDR4 contract pricing.
Imagine a World Where CXMT and Others Sell Cheap DRAM Modules—How Would They Reach the U.S. Market?
This is another primary concern when we talk about Chinese memory modules making their way into our personal computing devices. For those unaware, YMTC has been on the U.S. Entity List since December 2022, after claims that the company has been involved in deals with Huawei and the Chinese military. On the other hand, CXMT isn't on the Entity List, but the Department of War still bans the firm under Section 1260H, which means that any mainstream interest in CXMT could put the firm in trouble.
The U.S. has long opposed integrating core technologies into computing products sourced from Chinese vendors. Examples of it span AI and networking infrastructure, meaning that even if a prospect for Chinese memory suppliers opens up to have their modules integrated into end products sold to US customers, the administration could intervene and impose restrictions, which is another primary concern.
The prospect of getting U.S.-made, cheap RAM sticks these days sounds optimistic enough, given Chinese memory suppliers. Still, it's important to note that manufacturing constraints keep the likes of CXMT and YMTC significantly behind. Any effort for large-scale adoption from them will require investments that won't seem worthwhile.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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