Chinese memory-chip maker CXMT is preparing to enter the NAND flash market, challenging a segment dominated by Samsung Electronics and other foreign manufacturers as a global memory shortage creates an opportunity for Chinese suppliers to expand their presence.
ChangXin Memory Technologies, known as CXMT, plans to establish a research and development production line for NAND flash at its new plant in Beijing, two people familiar with the company’s plans told Reuters. The company has also established a research institute in the Chinese capital, where NAND development is among the projects underway, one of the sources said.
The move would mark a significant expansion for CXMT, which has built its position primarily in dynamic random access memory, or DRAM. It would also bring the company into direct competition with Yangtze Memory Technologies, or YMTC, China’s leading NAND producer.
Register for the next Tekedia Mini-MBA.
Register for Tekedia AI in Business Masterclass.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Three people familiar with the matter said CXMT has discussed its NAND plans with customers, including a newly established startup that intends to purchase its NAND chips for storage products used in AI systems and supercomputers. The sources declined to identify the startup.
CXMT’s plans remain at an early stage. It is not clear when the Beijing R&D production line will begin operating or whether the company will eventually move from research and trial production to large-scale commercial manufacturing.
The potential expansion comes as AI infrastructure is driving strong demand for memory chips. Industry executives expect the global shortage to persist through at least 2027, while TrendForce expects tightness in the NAND market to ease only in the second half of next year.
SK Hynix CEO Kwak Noh-jung said in July that 2027 could be the industry’s most difficult year from a supply perspective. Memory manufacturers have been directing more capital toward DRAM and high-bandwidth memory, or HBM, which are critical to AI servers, limiting additional investment in NAND production.
The distinction between the two markets is considered necessary for the deal. DRAM provides the working memory used by processors, while NAND is non-volatile storage used in smartphones, computers, and data centers.
As AI data centers consume increasing amounts of memory and storage, the resulting supply constraints have strengthened the position of manufacturers that can add capacity or secure supplies for customers.
CXMT and YMTC Move Into Each Other’s Territory
CXMT’s potential move into NAND would further blur the traditional division between China’s two major memory-chip manufacturers. The companies have often been described in China as the industry’s “twin stars,” but they have historically focused on different technologies. CXMT dominates domestic DRAM production, while YMTC is China’s leading NAND manufacturer.
That separation has already begun to weaken.
Reuters reported in April that YMTC had sent low-power DRAM samples to customers as it considered moving into CXMT’s core market. CXMT’s potential entry into NAND would create a corresponding overlap on the other side of the memory market.
Both companies remain behind the largest international memory manufacturers in technology and scale and are more exposed to lower-priced products. The current shortage, however, has strengthened their pricing power among some Chinese customers.
Reuters reported in July that some Chinese memory buyers were paying more for chips from domestic suppliers than for comparable products from foreign competitors, highlighting the effect of tight supply and the importance of local sources for companies seeking to secure memory.
The potential expansion into NAND would also give CXMT another route to diversify its customer base at a time when demand for memory is being reshaped by AI infrastructure. Samsung remains the largest NAND supplier globally. TrendForce estimated that Samsung held 29.3% of the market by revenue in the second quarter, followed by SK Hynix and US-based Micron Technology.
Entering that market would therefore put CXMT up against companies with much greater production scale and established positions with global customers. But the current supply shortage could provide an opening for additional capacity, particularly within China’s domestic technology ecosystem.
AI Demand Strengthens China’s Push For Memory Self-Sufficiency
CXMT’s expansion also fits into Beijing’s broader effort to reduce China’s reliance on overseas semiconductor suppliers. Both CXMT and YMTC have received 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 Hubei province.
Local government support has become an important part of China’s semiconductor strategy, with cities and provinces competing to attract investment in technologies considered important to national industrial and technological development.
CXMT is now expanding its footprint further. The company raised 57.92 billion yuan, or about $8.6 billion, in July through Asia’s largest initial public offering of the year. It also plans to build a second memory-chip plant in Beijing and has held funding discussions with a government-backed technology manufacturing hub, Reuters reported last month.
YMTC’s parent company, CCSH, is also preparing for a Shanghai listing that aims to raise 33 billion yuan.
US export controls have added another layer of urgency to China’s efforts to develop domestic memory suppliers. Washington placed YMTC on its Entity List in 2022 and subsequently tightened restrictions on China’s access to high-bandwidth memory used alongside advanced AI processors. Those restrictions have increased the importance of domestic alternatives as Chinese technology companies build AI systems and data-centre infrastructure.
NAND could provide an additional opportunity for CXMT at a time when the global memory industry is entering a period of unusually strong demand. The company still faces uncertainty over whether its current research and trial-production efforts will develop into commercial-scale NAND manufacturing.
If CXMT does make that transition, however, China’s two leading memory companies would be competing across both major categories of memory, while Beijing would gain another domestic supplier capable of serving the storage requirements of the country’s expanding AI infrastructure.