CXMT Pushes Ahead With HBM3E Despite Low Yields
China’s largest DRAM maker, ChangXin Memory Technologies, plans to begin limited production of HBM3E, an advanced type of high-bandwidth memory used with AI processors, despite yields of only 20 to 30 percent, Reuters reported on October 28, citing two people familiar with the matter.
CXMT has sent HBM3E samples to several domestic AI chip designers and is expected to begin limited production within the next two months, one of the people said.
High-bandwidth memory, made by vertically stacking DRAM chips so they can exchange data rapidly with AI processors, is a crucial component in the specialized chips used to train and run large language models. HBM3E is the fifth-generation product, an extension of HBM3.
The problem is yield, the share of chips coming off a production line that meet specifications. The people put CXMT’s HBM3E yields at about 20 to 30 percent, compared with around 70 percent at South Korea’s SK Hynix, the market leader. It is the first time a specific yield figure for CXMT’s HBM3E has been disclosed. CXMT did not respond to a request for comment, and SK Hynix did not immediately respond to a request for comment on the yield estimate.
Performance also lags. In testing, CXMT’s HBM3E performed closer to SK Hynix’s previous-generation HBM3 than to its HBM3E, one person said. CXMT has sent customers two versions of HBM3E, a standard design and an improved version with changes aimed at raising yields, another person said.
CXMT is pushing ahead anyway because the shortage of AI memory in China is that severe. The United States tightened restrictions on exports of certain advanced HBM products to China in December 2024, and Chinese AI chip companies have since struggled to secure supply. Reuters reported last month that Chinese AI chip companies such as Huawei and Cambricon raised AI chip prices by 20 to 50 percent amid memory costs.
The HBM market remains concentrated. Counterpoint Research put SK Hynix’s share of global HBM revenue at 50 percent in the second quarter, followed by Samsung Electronics at 33 percent and Micron at 18 percent. CXMT ranked fourth globally in DRAM revenue over the same period with a 10 percent share, but it has yet to rank in the HBM market.
The gap with South Korean makers remains wide. Samsung and SK Hynix are already mass-producing the next-generation HBM4 and have shipped samples of the more advanced HBM4E to customers, leaving CXMT a generation behind.
CXMT announced a large investment plan in late September covering research and development and a backend testing facility, a project expected to take 30 months and aimed at accelerating the generational transition of its products and processes. The Information reported in August that CXMT had begun small-scale HBM3E production and planned to expand output from 2027.
Reuters noted, however, that it will not be easy for CXMT to narrow the gap as United States export controls make it difficult to secure advanced semiconductor equipment. With access to advanced tools restricted, the pace of yield improvement itself is limited.
What to watch now is whether limited production actually starts within two months, whether customers qualify the product, and how quickly yields rise. The pace of yield improvement will decide when the business breaks even.
