China’s two largest memory manufacturers, CXMT and YMTC, are said to each be embarking on an unprecedented expansion spree as, amid a global memory shortage, they see a golden opportunity to close the gap with the big-three incumbents Samsung, SK hynix, and Micron.
The two Chinese memory giants want to significantly expand their respective DRAM and NAND production over the next two years, according to reporting by Nikkei Asia, as AI infrastructure continues to squeeze the memory sector dry. The expansions, which are understood to center on new fabs in Shanghai and Wuhan, come as the big three continue to prioritize HBM output for AI accelerators over conventional DRAM.
New fabs targeted for 2027
CXMT is preparing a major DRAM facility in Shanghai that’s expected to be two-to-three times larger than its existing Hefei headquarters, with equipment and installation beginning later this year and volume production targeted for 2027. YMTC, traditionally a NAND flash supplier, is constructing a third fab in Wuhan that will also come online around 2027. Roughly half of that facility’s planned output is expected to be dedicated to DRAM rather than NAND — a significant deviation from the norm for YMTC.
“The company’s plants in Hefei and Beijing are already running at full capacity,” a source told Nikkei Asia, adding that CXMT sees very high demand from local companies to expand capacity as soon as possible. Samsung and SK hynix have both warned customers that memory supply tightness is likely to persist into 2027 as they continue allocating capacity to AI.
YMTC pivots to HBM
Commodity DDR5 for PCs and servers is constrained primarily because suppliers have redirected investment and wafer starts toward HBM, which carries substantially higher margins and is essential for AI accelerators. SK hynix currently dominates this space, supplying around 60% of global output, with Samsung and Micron splitting most of the remainder. All three vendors are expanding HBM capacity, but doing so comes at the expense of conventional DRAM, which has rocketed in price, creating a massive demand-side gap among consumers calling for more supply.
CXMT and YMTC clearly want to fill this gap. While the former remains a few generations behind the leading edge, it has demonstrated working DDR5 designs — mass production is still delayed — and has reportedly delivered HBM samples to domestic AI customers, including Huawei. Chinese sources cited by Nikkei suggest that CXMT intends to add dedicated HBM3 production lines as part of its Shanghai fab, with initial volumes aimed at domestic AI accelerators.
Meanwhile, YMTC is leveraging its packaging expertise to move into HBM. Rather than competing head-to-head with CXMT on DRAM process technology, YMTC is expected to focus on advanced assembly and HBM integration, working with local partners to produce memory stacks suitable for AI workloads. 50% of the company’s new plant’s capacity will produce DRAM, according to Nikkei. “They [YMTC] started to develop their own DRAM more than two years ago… now it’s only a matter of time for them to produce quality DRAM and HBM going forward,” said one of YMTC’s suppliers
A rock and a hard place
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