ChangXin Memory's profit in the first quarter exceeds the total losses from the past decade, signaling the rise of domestic DRAM and challenging South Korea's industry giants.

Korean Media: Yangtze Memory's Losses Over the Past Decade Have Been Recouped in Just One Quarter This Year!

On July 31, South Korean media outlet *Herald Economic* published an article stating that over the past decade, China’s DRAM company Yangtze Memory Technologies accumulated losses amounting to RMB 36.605 billion, while reporting a net profit of RMB 33 billion in the first quarter of this year.

The company’s recent performance has been exceptionally strong—achieving profits equivalent to its total losses over the past ten years within just one quarter. Amid rising DRAM shortages driven by artificial intelligence demand, Yangtze Memory has rapidly expanded its market share, posing a growing threat to South Korean memory giants such as Samsung Electronics and SK Hynix.

Recently, Yangtze Memory signed a long-term DRAM supply contract with Tencent Holdings, China’s largest internet company, worth over RMB 20 billion. The agreement spans 3 to 5 years, though it remains unconfirmed whether it includes HBM. Reports also indicate that Yangtze Memory is currently negotiating similar deals with other major Chinese internet companies, with key clients including Alibaba Cloud, ByteDance, Lenovo, and Xiaomi.

This contract between Yangtze Memory and Tencent undoubtedly represents a heavy blow to South Korean memory manufacturers, as China’s DRAM market has long been dominated by Korean firms. Until 2020, Chinese enterprises had not used domestically produced DRAM. However, in recent years, Chinese DRAM companies—including Yangtze Memory—have rapidly risen and expanded their domestic market share. If large Chinese tech companies begin adopting domestic memory at scale, Samsung Electronics’ and SK Hynix’s general-purpose DRAM revenues could decline in the medium to long term.

Meanwhile, major U.S. PC manufacturers such as HP and Dell are considering adopting DRAM from Yangtze Memory. Experts analyze: “China’s DRAM manufacturers have not yet caught up technologically with industry leaders like Samsung Electronics, SK Hynix, and Micron. However, their products are already being used in consumer-facing B2C products for Apple and PC companies. This is because B2C products can tolerate slightly less stable DRAM—any issues during use can be easily resolved by simply restarting the power supply. In the lower-technology-barrier B2C DRAM market, Chinese memory companies may further expand their market share in the future, potentially posing adverse impacts on Samsung Electronics and SK Hynix in the medium to long term.”

In 2023, Yangtze Memory achieved a net profit of RMB 7.1 billion, turning profitable for the first time since its founding in 2016. Its revenue reached RMB 61.799 billion, up 155% year-on-year. In the first quarter of this year, revenue hit RMB 50.8 billion, surging 719.13% compared to the same period last year.

The company’s market share has also grown rapidly. According to data from market research firm Omdia, Yangtze Memory’s DRAM market share increased from 3.97% in Q2 of last year to 7.76% in Q4 of the same year. Nevertheless, Samsung Electronics, SK Hynix, and Micron still collectively hold over 90% of the market share.

Original source: toutiao.com/article/1872194870539276/

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the official stance of the publisher.