‘Semiconductor Ambition’—China Accelerates DDR5 DRAM Push, Testing Korea’s Grip on Memory Leadership

CXMT Raising DDR5 Share to 60% This Year
Potential Price Crash if Mass-Volume Offensive Materializes
Rapid Expansion by Chinese Foundry and Fabless Players

China’s presence in the global semiconductor market is growing more formidable. After flooding the legacy Double Data Rate (DDR)4 DRAM segment with massive volumes and asserting its foothold, China is now moving into full-scale production in the more advanced DDR5 DRAM market. Analysts warn that, if China accelerates capacity expansion, the “China-led supply shock” witnessed over the past five years in the steel and petrochemical sectors could reappear in semiconductors as well.

China’s Mass-Production Threshold as Market Balancing Variable

According to Taiwan-based IT outlet DigiTimes on the 20th, Acer Chairman and CEO Jason Chen (陳俊) stated that while Acer has secured component supply through early 2026, the broader industry outlook depends on the ability of Chinese manufacturers to scale up memory output. Recent forecasts suggesting the current memory shortage could persist through 2027 reflect uncertainties surrounding China’s capacity expansion. “The core issue is whether Chinese memory manufacturers can achieve stable mass production,” Chen emphasized. He added that several Chinese suppliers have already begun shipping DDR5 DRAM, and such moves may help restore market balance earlier than currently expected.

Amid surging demand for artificial intelligence (AI) servers and ongoing price spikes as Samsung Electronics and SK Hynix adjust DDR5 output ratios, Chinese firms have now mobilized to begin large-scale DDR5 production. According to industry sources, ChangXin Memory Technologies (CXMT), China’s leading DRAM manufacturer, plans to gradually wind down production of server and PC DDR4 DRAM starting this year. Full termination of DDR4 output for server and PC applications is expected by mid-next year. However, some lines will remain operational to support domestic OEM (original equipment manufacturing) supply.

CXMT is discontinuing DDR4 to ramp up DDR5, targeting a shift whereby DDR5 will account for 60% of its total memory production this year. Industry estimates project CXMT’s monthly wafer capacity to reach 280,000 units by year-end and exceed 300,000 next year—equivalent to roughly 15% of global DRAM output. CXMT’s move toward DDR5 began less than a year after it launched mass production of DDR4 in the second half of last year. After achieving DDR5 mass production in December, CXMT delivered server-grade DDR5 samples to domestic clients earlier this year. The strategy reflects a pivot away from low-margin, commoditized DDR4 toward DDR5, where demand is surging due to AI adoption.

Acceleration of Industrial Upgrading—Korea Could Be Overtaken in Five Years

As DDR5 remains the leading-generation DRAM widely produced by Samsung Electronics and SK Hynix, any rise in China’s DDR5 supply will inevitably weigh on the earnings of Korean manufacturers. DDR5 is the most advanced mainstream DRAM currently available. Last year, when China unleashed a volume offensive in DDR4, Korean firms responded by accelerating process migration to DDR5 and reinforcing their premium-market focus. But if China leverages its enormous domestic market to flood the global DDR5 segment, Korean profitability will inevitably erode.

The steep decline in DDR4 prices in the second half of last year was also triggered by China’s volume push. The monthly contract price of PC-oriented DDR4 8Gb (1Gx8), which had not fallen since October 2023, dropped 2.38% in August of the following year to USD 2.05 (converted from KRW). In September, it plunged another 17.07% from August, and in November it fell an additional 20.59%.

While many experts argue that Chinese memory firms are not yet capable of disrupting the global market—given limitations in technology maturity, yield, and stable mass-production systems—the current DRAM price surge and supply shortage could give Chinese vendors an opening to build manufacturing experience and expand their supply chains. With Beijing placing semiconductor self-reliance at the top of its industrial agenda, broader adoption of local memory solutions is widely expected to accelerate. In a landscape defined by persistent U.S. export controls and geopolitical risks, a policy shift toward increasing the share of domestically sourced chips could enable Chinese firms to gain market share faster than anticipated in mainstream DRAM.

Some forecasts even warn that Korea’s semiconductor competitiveness could fall behind China’s entirely by 2030. According to a survey by the Federation of Korean Industries (FKI) covering the top 1,000 companies across Korea’s ten leading export industries, current semiconductor competitiveness (index score: 99.3; above 100 indicates Chinese advantage) shows Korea maintaining a slight lead, but respondents expect China to surpass Korea by 2030.

Ferocious Advances in Foundry and Fabless Segments

China’s technological surge is not merely the result of corporate initiatives—it is the culmination of a decade-long national strategy. “Made in China 2025,” launched in 2015 to transform the country into a manufacturing powerhouse rivaling Korea, Germany, and Japan, has now borne tangible fruit. The alignment of Communist Party state power with private-sector execution enabled China to concentrate limited capital and talent on leapfrogging into strategic future technologies. The clearest example is its rapid ascendance to the top of the global electric-vehicle market by bypassing internal-combustion dominance altogether.

Armed with this confidence, China is also accelerating in the semiconductor foundry space. According to Counterpoint Research, China’s largest foundry, Semiconductor Manufacturing International Corp. (SMIC, 中芯國際), recently posted record quarterly earnings. Its third-quarter net profit rose 28.9% year-on-year to USD 191.8 million, while revenue increased 9.7% to USD 2.38 billion, exceeding market expectations. The company is running at 95.8% utilization—essentially full capacity—and aims to rapidly expand 5nm and 7nm fabs.

SMIC’s momentum is closely tied to U.S. export controls. With sanctions fueling China’s semiconductor self-reliance drive, SMIC has absorbed soaring domestic demand from Huawei and a growing pipeline of local AI-chip and fabless clients. Its capital expenditure is enormous: USD 7.33 billion last year and an even larger outlay expected this year. Since 2020, accumulated investment has reportedly surpassed USD 30 billion.

The gap with Samsung Electronics in foundry is narrowing. TrendForce data shows Samsung’s market share dropping from around 11% in Q2 last year to the 7% range in Q2 this year, while SMIC has remained near 5%, improving its relative position. Although some of the share shift reflects gains by top-tier competitors, the broader trend points to a convergence between Samsung and SMIC. Experts warn that once China secures yields in the 80% range, Korean firms’ cost-competitiveness advantage could erode swiftly.

China’s fabless sector is also posting explosive growth. Cambricon, often called “China’s Nvidia,” reported third-quarter revenue of USD 238 million (converted from CNY), nearly fourteen times higher than a year earlier. Net profit reached USD 78.4 million, a dramatic turnaround from a USD 27.8 million loss in the same period last year. Cambricon’s return to profitability began in the fourth quarter of last year, coinciding with intensified U.S. sanctions. Its stock has jumped more than 91% this year.

Moore Threads, a GPU-focused fabless founded in 2020 by Nvidia China’s former country head, recently passed its IPO review on Shanghai’s STAR Market. According to its prospectus, first-half revenue reached USD 100.3 million (converted from CNY), exceeding the company’s total revenue over the past three years combined (USD 86.6 million). Roughly 95% of first-half revenue came from AI-related products such as AI computing clusters.

Meanwhile, the decline of U.S. semiconductor giants in China is deepening across AI chips, memory, and computing. Nvidia CEO Jensen Huang recently revealed at a Citadel Securities event in New York that U.S. export controls had driven Nvidia’s market share for advanced chips in China from 95% to 0%. “We are now completely shut out of China’s advanced-chip market,” he said. AMD and Intel face similar challenges. With export restrictions blocking sales of high-performance AI chips, they have sought to pivot to downgraded, China-specific low-spec models, but are increasingly losing ground to domestic competitors.