Tech war: China exploring ways to make its own AI memory chips despite US sanctions, sources say

China is exploring ways to produce its own high-bandwidth memory (HBM), the next-generation of memory chips tailored for artificial intelligence (AI) processors, as it pushes ahead with a semiconductor self-sufficiency drive amid US sanctions, industry sources said.

While it will be an uphill battle to catch up with global leaders like SK Hynix, Samsung Electronics and Micron Technology given the impact of Washington’s sanctions, the Chinese government has determined that the country must become self-sufficient in HBMs even though it may take years, they added.

Industry sources, who are familiar with the matter but declined to be named due to the sensitivity of the subject, said China’s top dynamic random access memory (DRAM) maker, ChangXin Memory Technologies (CXMT), is the country’s best hope for HBMs, but it may take up to four years to bring products to the market.

If CXMT or other Chinese chip makers decide to go ahead, they will be restricted to using less advanced technologies to manufacture the powerful DRAM chips that are in hot demand around the world, the sources said.

Hefei-based CXMT, which reportedly is planning an initial public offering this year based on a valuation of US$14.5 billion, did not reply to a request for comment.

SK Hynix, considered a leader in the technology with a 50 per cent global market share, developed HBM3 in October 2021 and entered mass production in June 2022. The Korean company noted in its promotional materials that HBM technology was a “prerequisite for Levels 4 and 5 of driving automation in autonomous vehicles”.

Demand for HBM chips is expected to grow by almost 60 per cent in 2023, as they are the preferred solution for overcoming memory transfer speed restrictions due to bandwidth limitations, according to a report by tech consultancy TrendForce.