South Korean media: Changxin Memory accelerates its transformation to high-end products!

On June 6, South Korean media "Etoday" published an article stating that recently, Chinese semiconductor companies are rapidly shifting from the low-cost general-purpose memory market to high-specification, high-value-added products. In particular, with the rapid growth of technological capabilities, led by Changxin Memory, they are mass-producing cutting-edge products such as Double Data Rate (DDR5) and High Bandwidth Memory (HBM). The South Korean industry believes that South Korean semiconductor companies still have a clear technical advantage in terms of process perfection, yield rate, and market responsiveness.

According to market research company TrendForce, Changxin Memory plans to gradually reduce DDR4 shipments by the end of this year. Although the specific scale of production cuts is unclear, it is speculated that shipments may stop as early as the end of this year.

DDR4 is a representative low-cost general-purpose memory widely used in PCs, laptops, servers, etc. Changxin Memory is expected to accelerate the construction of a product portfolio centered on high-specification, high-value-added cutting-edge products such as those focused on by South Korean companies, like DDR5 and HBM.

Since last year, Changxin Memory has achieved significant growth in the DDR4 market through a low-price offensive. Changxin's market share was less than 1% in 2020 but quickly grew to 5% last year. According to market research company Omdia, Changxin Memory's DRAM capacity is expected to increase from 1.62 million wafers last year to 2.73 million wafers this year, a rise of 68%. It has already caught up to Micron, which ranks third in the market.

However, South Korean companies have been accelerating their "de-generalization" strategy, comprehensively restructuring low-yield products. This year, both Samsung Electronics and SK Hynix have boldly reduced the proportion of general-purpose DRAM and concentrated on reorganizing their profit structures around advanced memory products. Samsung Electronics plans to reduce the proportion of DDR4, which accounted for more than 30% of total DRAM sales last year, to single digits. SK Hynix has also significantly expanded HBM capacity and established a mass production system for the world's first HBM3E (fifth generation).

The issue is that Changxin Memory has recently shown remarkable movements in the high-end semiconductor market. Although there are still large gaps in performance, reliability, yield stability, and mass production capabilities in the advanced market, if it launches a quantity offensive while ensuring technological strength, it will inevitably have a negative impact on the profitability of South Korean companies.

In fact, Changxin Memory began mass-producing DDR5 at the end of last year and recently transitioned from the existing 17nm process to the latest 16nm process. This process is similar to the third-generation 10nm-class process adopted by South Korean companies in 2021, narrowing the technological gap to about three years. HBM has started mass-producing the third-generation product HBM2E and is currently developing HBM3 (fourth generation), with the goal of achieving mass production this year.

Experts say that China may take some time to gain an advantage in the advanced product market, but the pace of catching up is very fast.

Lee Gwi-bok, a researcher at the Korea Institute of Electronics Technology, said, "Chinese companies like Changxin Memory indeed pose a threat to domestic South Korean companies by increasing DRAM production, but there remains a gap in advanced technologies, making it unlikely to catch up immediately." He added, "The top priority is stabilizing design and processes. Only then can we ensure yields and maintain market advantages."

Original Source: https://www.toutiao.com/article/1834182216974345/

Disclaimer: This article represents the views of the author alone.