Changxin Memory Technologies (CXMT), a Chinese dynamic random access memory (DRAM) manufacturer, is projected to capture as much as 15% of the global DRAM market in the coming years, potentially triggering significant price competition. This forecast comes from Gou Jiazhang, general manager of Silicon Motion Technology, a SSD controller developer.
Rapid Growth of CXMT
Just three years ago, CXMT held less than 2% of the global DRAM market. However, increased production capacity and the scaling up of DDR4, LPDDR4, and LPDDR5 memory are expected to boost its share to 10% in 2024. With the company now reportedly increasing DDR5 production, market share could reach 15% by late 2025, according to Gou Jiazhang.
CXMT’s production has reportedly increased from 70,000 wafer starts per month (WSPM) in 2022 to 120,000 WSPM in 2023 and 200,000 WSPM in 2024. This growth signifies China's growing influence in the memory sector and poses a direct challenge to established leaders like Samsung, SK hynix, and Micron.
Market Dynamics
While TrendForce has not provided specific market share estimates for CXMT in Q2 2024, the company has secured lucrative contracts with major smartphone manufacturers like Xiaomi and Transsion (together commanding around 20% of the market) and also supplies DRAM to Chinese PC makers. This indicates that CXMT’s market share is already significant. However, US and Dutch sanctions and the company’s emphasis on fulfilling domestic demand may limit its global market saturation.
Recent reports indicate that CXMT and Fujian Jinhua sold DDR4 memory at a 50% discount, forcing major manufacturers to scale back their DDR4 production. As CXMT is now producing DDR5, it remains unclear if they will continue this aggressive pricing strategy or focus on profitability.
Potential for Disruption
CXMT's entry into the DDR5 market has the potential to significantly disrupt the industry. If it captures a substantial portion of the Chinese market, it may need to expand beyond China, forcing competitors to redirect their output to other regions. This redistribution could lead to increased global supply and potentially lower prices, benefiting consumers but creating instability in the DRAM industry. Established players will likely focus more on the enterprise segment to counter this.
