CXMT Prepares NAND Flash Foray in Beijing as Global Memory Crunch Bites

Chinese chipmaker CXMT is preparing to enter the NAND flash memory market, according to three people with knowledge of the matter, a step that would extend the DRAM specialist into one of the semiconductor industry's fastest-growing segments and set it against both foreign leaders and its domestic rival YMTC.

The company, formally ChangXin Memory Technologies, plans to set up a research-and-development production line for NAND flash at its new plant in Beijing, two of the sources said. It has also established a research institute in the Chinese capital, where the projects include NAND development, according to one of the people.

CXMT has discussed the plans with customers, including a recently founded startup that intends to buy its NAND chips for storage products used in AI systems and supercomputers, a third person said. The identity of that company was not disclosed. The sources spoke on condition of anonymity because the plans are private.

It remains unclear when the R&D line would begin operating, or whether CXMT intends to move from research and trial production to large-scale commercial manufacturing. CXMT, YMTC, Samsung and the Beijing municipal government did not immediately respond to requests for comment.

The push comes amid a global memory shortage driven by strong demand from artificial intelligence servers, which industry executives expect to persist through at least 2027. SK Hynix chief executive Kwak Noh-jung said in July that 2027 could be the industry's toughest year from a supply standpoint, while research firm TrendForce expects NAND supply tightness to ease only in the second half of next year.

Manufacturers have directed capital spending towards DRAM and high-bandwidth memory, or HBM, limiting additions to NAND flash capacity and deepening shortages in that segment, according to TrendForce. DRAM provides the working memory used by processors, while NAND stores data in phones, computers and data centres.

Samsung was the world's largest NAND supplier by revenue in the second quarter, with a 29.3% share, TrendForce data shows. SK Hynix ranked second, followed by US-based Micron Technology.

CXMT and YMTC, often described in China as the "twin stars" of the country's memory-chip industry, have largely operated in separate markets. CXMT dominates Chinese DRAM production, while YMTC is the country's leading NAND manufacturer. Those boundaries have begun to blur: in April, reports said YMTC had sent low-power DRAM samples to customers as it weighed entry into CXMT's core market.

Both firms trail larger international rivals and are more exposed to lower-priced products, but tight supplies have strengthened their pricing power with some Chinese customers, in some cases allowing them to charge more than foreign competitors.

The two companies have become key pillars of Beijing's drive for a self-sufficient chip industry and for closing the gap in strategic technologies such as AI. They grew with backing from China's national semiconductor fund and local governments. CXMT expanded with support from Hefei, the capital of Anhui province, while YMTC was built in Wuhan, the capital of central Hubei province, reflecting competition among local governments to attract strategic industries through investment and incentives.

CXMT raised 57.92 billion yuan ($8.6 billion) in July in Asia's biggest initial public offering this year. It plans a second memory-chip plant in Beijing and was in funding talks with a tech manufacturing hub backed by the local government, according to earlier reports. YMTC's parent, CCSH, is also planning a Shanghai listing aimed at raising 33 billion yuan.

Washington's export restrictions have added urgency to China's efforts to develop domestic memory suppliers. The United States placed YMTC on its Entity List in 2022 and later tightened China's access to HBM chips used alongside AI processors.