[Edaily Reporter JAEMIN SONG ] As the memory supply shortage persists due to expanding investment in artificial intelligence (AI), Chinese memory manufacturers are emerging as a new variable in the global supply chain. While SamsungElectronics and SK hynix have focused on high-bandwidth memory (HBM) production, Chinese companies have made significant strides in the general-purpose (legacy) memory market. With Apple recently considering the adoption of Chinese-made memory and the possibility of its use by some big tech companies being discussed, changes in the memory market landscape appear to be gaining momentum.

According to foreign media outlets such as the Financial Times (FT) on the 29th, Apple is reportedly in discussions with the U.S. government regarding the purchase of memory from the Chinese DRAM manufacturer Changxin Memory Technology (CXMT). There is also speculation that Google may be considering Chinese-made memory for its next-generation infrastructure.

This is interpreted as a sign that AI-driven supply shortages are beginning to reshape the memory supply chain. As demand for HBM and server DRAM surged, the world’s top three memory manufacturers shifted their production capacity toward AI products, leading to a reduction in the supply of general-purpose memory and a sharp rise in prices.

In fact, according to DRAMeXchange, the average spot price for DDR4 8Gb (1Gx8)—a general-purpose DRAM used in PCs—jumped nearly tenfold in just one year, from $2.10 at the end of May last year to $20.00 at the end of last month. During the same period, the price of DDR5 64GB RDIMMs for servers is estimated to have more than doubled, rising from around $500 to between $1,200 and $1,300. With the price increase for general-purpose DRAM outpacing that of HBM, some analysts have noted that DDR5 revenue per wafer surpassed that of HBM in the first quarter of this year.

“Chinese Memory Is Also an Option”… Supply Chain Shifts Begin

This is the backdrop behind Apple’s consideration of

Chinese

memory. As soaring memory prices increase cost pressures, the company is moving to secure new suppliers beyond SamsungElectronics, SK hynix, and Micron. In addition to Apple, some global PC manufacturers are reportedly considering Chinese memory as part of efforts to diversify their supply chains.

However, whether they will actually be incorporated into the supply chain depends on political variables. CXMT and Yangtze Memory Technologies (YMTC) are included on the U.S. Department of Defense’s list of “Chinese military enterprises,” but they have not yet been added to the U.S. Department of Commerce’s Entity List. While there are no direct restrictions on transactions, the possibility of future additional sanctions or congressional backlash remains.

In 2022, Apple had also pursued a plan to use YMTC’s NAND flash memory in iPhones for the Chinese domestic market but withdrew the plan due to backlash from U.S. political circles and concerns raised by the Biden administration.

Jeon Byeong-seo, director of the China Economic and Financial Research Institute, said, “Currently, the company is merely on the Department of Defense’s list; transactions are not legally prohibited.” He added, “Apple’s move is less about acknowledging China’s memory technology capabilities and more about seeking available supplies amid a shortage.” He further explained, “There is also an element of consulting with the government in advance, given the possibility of additional regulations from the U.S. Congress.”

HBM for South Korea, General-Purpose Memory for China?

The rise of Chinese memory companies is also evident in their market share. According to Counterpoint Research, CXMT’s share of the global DRAM market in the first quarter of this year was 8%, more than doubling from 3% in the same period last year. NAND flash manufacturer YMTC also increased its market share from 8% to 13% during the same period.

Analysts suggest that while SamsungElectronics and SK hynix were converting their legacy production lines to expand HBM production, Chinese companies filled the void in the general-purpose market. YMTC’s listing on the STAR Market and its expansion of production capacity are also cited as factors that will accelerate its pursuit of market leadership.

However, it is too early to view this as a sign that the competitiveness of Korean companies in the HBM market is waning. In the cutting-edge markets for HBM3E and HBM4, SamsungElectronics and SK hynix still maintain a technological edge, and China’s pursuit is limited by U.S. restrictions on advanced equipment.

Director Jeon stated, “This is a separate issue from HBM competitiveness,” adding, “The fact that Apple considered Chinese memory does not mean that China’s memory technology has caught up with Korea’s; rather, it is a signal that memory supply has become structurally insufficient due to expanded AI investment.” He continued, “In the future, a dual-structure may emerge in which Korean companies expand their influence in HBM while Chinese companies do the same in general-purpose memory,” adding, “Domestic companies must manage not only their overwhelming lead in HBM but also the profitability and cost competitiveness of their general-purpose products.”