[Edaily Reporter KIM JUNG YOU ] China’s Changxin Memory (CXMT) has decided to press ahead with mass production of next-generation high-bandwidth memory (HBM3E) despite facing extreme production difficulties with a yield rate of just 20%. This move reflects the Chinese government’s sense of urgency to cultivate a domestic AI processor ecosystem, even as the country faces a supply shortage of AI memory due to U.S. semiconductor restrictions targeting China.

On the 28th (local time), Reuters reported, citing multiple sources familiar with the matter, that CXMT has begun preparations for mass production of HBM3E—a fifth-generation high-bandwidth memory (HBM) product—even though its yield rate is only around 20%. This is due to the U.S. government’s restrictions on advanced technology, which have blocked access to foreign AI semiconductors such as those from NVIDIA.

According to sources cited by Reuters, CXMT has already provided HBM3E samples to major domestic fabless (semiconductor design) companies, including Huawei, Cambricon, MetaX, and Ilubata CoreX. It is reported that the company plans to begin limited initial production within the next two months.

Currently, CXMT’s yield rate is reportedly only around 20–30 percent. This figure falls far short of the yield rate (approximately 70 percent) achieved by the industry leader, South Korea’s SK hynix(000660). A low yield rate inevitably increases the proportion of chips that must be scrapped or reworked, driving up manufacturing costs sharply.

Nevertheless, as Chinese AI chip manufacturers are experiencing production disruptions due to a severe memory shortage, CXMT appears to be pushing ahead with production despite incurring massive losses. In fact, according to foreign media reports, Chinese AI semiconductor companies have recently raised AI chip prices by about 20–50% due to rising memory procurement costs.

The actual performance of the HBM3E developed by CXMT has been assessed as being closer to that of SK hynix’s previous-generation HBM3 product rather than its current-generation counterpart.

According to global market research firm Counterpoint Research, SK hynix took the top spot in global HBM revenue share in the second quarter of this year with 50%, followed by SamsungElectronics (33%) and U.S.-based Micron Technology (18%).

In contrast, CXMT—which ranks fourth in the global general DRAM market (with a 10% share)—is struggling to close the gap with the market leaders due to U.S. export restrictions on advanced equipment.

Reuters noted, “Considering that SamsungElectronics has already begun expanding mass production of HBM4 and shipping HBM4E samples, CXMT’s commercial HBM technology is analyzed to be at least one generation behind the global leaders.”