Chinese memory chipmaker ChangXin Memory Technologies is preparing to move into NAND flash production, setting up a potential new contest with Samsung Electronics and domestic rival Yangtze Memory Technologies as a worldwide shortage of memory chips puts pressure on supplies.
Three people familiar with the company’s plans said CXMT, which has built its business around dynamic random access memory, or DRAM, is preparing research and development work for NAND flash at a new facility in Beijing. The move would take the company into a different part of the memory market and give it access to customers beyond its established DRAM business.
The timing is significant. Demand from artificial intelligence servers has sharply increased pressure on memory supplies, while chipmakers have directed much of their investment toward DRAM and high bandwidth memory, known as HBM. That has left less new capacity available for NAND, the type of memory used to store data in smartphones, computers and data centres.
Industry executives expect tight conditions to continue for years. SK Hynix chief executive Kwak Noh jung said in July that 2027 could become the industry’s most difficult year from a supply perspective. Research firm TrendForce has separately forecast that the current tightness in NAND supplies will ease only in the second half of next year.
For CXMT, the shortage creates an opportunity to test whether its manufacturing capabilities can be extended beyond DRAM.
Beijing facility to support NAND research
Two people familiar with the plans said CXMT intends to establish an R&D production line for NAND flash at its new plant in Beijing. The company has also established a research institute in the Chinese capital, with NAND development among the projects being pursued there, according to one of the sources.
The planned line appears to be focused initially on research and trial production rather than immediate mass manufacturing. It is not clear when the R&D line will begin operating, how much capacity it will have or whether CXMT has already decided to proceed from experimental production to commercial scale NAND manufacturing.
Those details matter because NAND production requires different technologies and manufacturing processes from DRAM. Entering the market would therefore involve more than simply adding another product to CXMT’s existing portfolio.
The company has nevertheless begun discussing its NAND ambitions with potential customers.
A third person familiar with the matter said CXMT had discussed its plans with customers, including a newly established startup that intends to purchase CXMT NAND chips for storage products designed for artificial intelligence systems and supercomputers. The source did not identify the startup.
The discussions suggest that CXMT is considering applications beyond conventional consumer electronics. AI infrastructure has become one of the largest sources of new demand across the semiconductor industry, with data centres requiring large quantities of memory and storage as operators expand computing capacity.
CXMT, also known as ChangXin Memory Technologies, did not immediately respond to requests for comment. YMTC, Samsung Electronics and the Beijing municipal government also did not immediately respond.
The three sources asked not to be identified because CXMT’s plans remain private.
A new challenge for Samsung and YMTC
The global NAND market is currently led by established manufacturers with decades of experience in memory technology.
Samsung was the world’s largest NAND supplier by revenue in the second quarter, holding a 29.3 percent market share, according to TrendForce. SK Hynix ranked second, followed by US based Micron Technology.
CXMT would be entering a market where its domestic competitor YMTC already has an established position. YMTC, or Yangtze Memory Technologies, is China’s leading NAND manufacturer and has spent years developing its own flash memory technology.
The two Chinese companies have traditionally occupied different sections of the memory industry. CXMT has concentrated on DRAM, the working memory that processors use to access data during computing tasks. YMTC has concentrated on NAND, which retains stored information even when a device is switched off.
That division is now beginning to change.
Reuters reported in April that YMTC had provided customers with samples of low power DRAM as the company considered moving into a market dominated in China by CXMT. If CXMT now advances into NAND, the two companies could find themselves competing across both major memory categories.
The shift reflects a broader change within China’s semiconductor industry, where companies that once focused on narrowly defined product categories are increasingly looking to expand their technological capabilities.
Memory shortage changes the competitive picture
CXMT and YMTC remain behind the largest international memory manufacturers in scale and technology, and both Chinese companies have greater exposure to lower priced products.
But the current shortage has altered the commercial environment.
Limited supply has strengthened the negotiating position of some Chinese memory manufacturers, allowing them to command higher prices from certain customers. Reuters reported in July that CXMT and YMTC had, in some cases, charged more than overseas competitors for memory products.
That development could provide additional financial support as the companies expand production and develop new technologies.
The shortage also reflects an unusual imbalance in the memory market. Manufacturers are spending heavily to meet demand for DRAM and HBM, particularly as AI companies build large clusters of advanced processors. HBM is a specialized form of memory used alongside high performance processors and has become one of the most closely watched components in the AI hardware supply chain.
NAND serves a different purpose, storing large volumes of information rather than acting primarily as working memory. Yet the two markets compete for investment, manufacturing resources and semiconductor industry capital.
With manufacturers prioritizing higher growth areas such as HBM, relatively limited additions to NAND capacity have contributed to tighter supplies.
For CXMT, developing NAND technology now could allow the company to take advantage of that market imbalance while reducing its reliance on a single memory category.
Beijing and Hefei push CXMT’s expansion
CXMT’s growth has been closely connected to China’s broader effort to develop domestic semiconductor capabilities.
The company has received backing from China’s national semiconductor fund as well as local government support. Hefei, the capital of Anhui province in eastern China, has played a major role in CXMT’s development and expansion.
YMTC has followed a similar path in Wuhan, the capital of central China’s Hubei province.
The involvement of local governments reflects intense competition across China to attract semiconductor manufacturing. Provincial and municipal authorities have provided financing, infrastructure and other incentives in an effort to establish strategic technology industries in their regions.
CXMT’s expansion gathered further momentum in July when the company raised 57.92 billion yuan, or about US$8.6 billion, in an initial public offering. The listing was the largest IPO in Asia during the year at that point, giving the company substantial new financial resources for expansion.
The company is also planning a second memory chip plant in Beijing. Reuters reported last month that CXMT was in funding discussions with a technology manufacturing hub backed by the Beijing government.
YMTC’s parent company, Chinese state linked semiconductor group CCSH, is also preparing for a Shanghai listing that aims to raise 33 billion yuan.
The fundraising plans underline the scale of China’s push to build a domestic memory industry at a time when access to foreign semiconductor technology has become more difficult.
US restrictions add pressure on Chinese memory makers
Washington’s export controls have added another layer to the competition.
The United States placed YMTC on its Entity List in 2022, restricting its access to certain US technology and products. Washington has also tightened controls affecting China’s access to high bandwidth memory used in AI computing systems.
Those measures have increased pressure on Chinese companies to develop domestic alternatives and secure their own supply chains.
For Beijing, memory chips have become strategically important because they are used throughout the computing industry, including in systems supporting artificial intelligence. Reducing dependence on overseas suppliers is therefore part of the wider effort to strengthen China’s semiconductor sector.
CXMT’s potential entry into NAND fits directly into that strategy, but success will depend on whether the company can develop competitive technology, secure customers and scale production at commercially viable costs.
A research line in Beijing would be an early step rather than proof of a full scale manufacturing programme. The company still has to demonstrate that its NAND technology can meet customer requirements and compete with established suppliers.
If CXMT proceeds beyond research and trial production, the consequences could extend beyond the company itself. China’s memory industry would have two major domestic players with overlapping ambitions, while global suppliers would face another potential competitor at a time when AI driven demand is already reshaping the market.
The immediate question is therefore not simply whether CXMT can make NAND chips, but whether it can turn an R&D programme into reliable commercial supply.
Will CXMT’s planned NAND expansion reshape China’s memory industry, or will the technical and financial barriers to large scale production keep the company focused on DRAM?