China’s efforts to develop home-grown artificial intelligence (AI) semiconductors are facing fresh setbacks as the US prepares to implement new rules restricting South Korean exports of advanced memory chips to Chinese companies.
The mainland would find itself in a difficult position if the supply of high-bandwidth memory (HBM) chips from South Korea is cut off by new US restrictions because of the lack of domestic alternatives, according to industry insiders. HBM chips, dynamic random-access memories (DRAMs) that are vertically connected using advanced packaging technologies, are vital components for graphic processing units (GPUs) and other AI accelerators.
Washington is considering new export rules to limit China-bound shipment of such chips, Reuters reported last week. Some Chinese AI chip firms have already been cut off from foreign wafer foundry services at the 7-nanometre node, which is mandatory for developing advanced AI semiconductors.
A low-power double data rate synchronous DRAM developed by CXMT. Photo: Handout
South Korean memory chip giants SK Hynix and Samsung Electronics dominate the supply of HBMs, each controlling about 48 per cent of the global market share in 2023, according to data from Taiwanese research firm TrendForce. China heavily depends on South Korea for memory chips, with Samsung and SK Hynix both experiencing surging China sales during the first half of the year amid the AI chip boom.
“If China can’t import HBM, it will be hurt in the short to mid-term,” said Jeongdong Choe, a senior analyst at Canadian research firm TechInsights. “HBM chips used in China are mainly from Samsung and SK Hynix, especially HBM2 and HBM2E.”
Despite strong financial support from the government, China’s top DRAM maker ChangXin Memory Technologies (CXMT) has not achieved the ability to produce HBM in volume. The company’s technology lags behind Korean competitors by at least two generations, despite efforts to catch up since 2023.
CXMT is working to develop its first domestically-made HBM in partnership with a domestic chip packaging and testing company, according to a note issued Monday by US investment bank Morgan Stanley by analysts Shawn Kim, Duan Liu and Michelle Kim.
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