CXMT Launches HBM3E Production for AI with Only 20–30% Yield: China Attempts to Close Accelerator Memory Deficit

Chinese memory manufacturer ChangXin Memory Technologies (CXMT) plans to begin small-scale production of HBM3E within the next two months—an advanced type of high-speed memory used in tandem with artificial intelligence processors. This is reported by Reuters, citing industry sources. The company has already sent chip samples to several local AI accelerator developers, making the launch one of China's most noticeable steps in a segment previously controlled effectively by just three players: SK hynix, Samsung, and Micron.

Memory Shortage and Sanctions Background

CXMT's decision is directly tied to the acute shortage of AI memory in China. These chips are critical for implementing the national program to create domestic alternatives to Nvidia AI accelerators, shipments of which advanced models to the PRC Washington restricts. In December 2024, the US tightened export controls on certain types of HBM, after which Chinese manufacturers increasingly try to procure such memory through unofficial channels, where prices can be several times higher than market rates. Under these conditions, domestic production—even if imperfect—becomes a strategic necessity.

The Economics of Low Yields

The key challenge of the launch is the extremely low yield of usable dies: according to Reuters, it stands at around 20–30%, whereas industry leader SK hynix achieves roughly 70%. Due to this high defect rate, production is costly, requiring a significant portion of output to be discarded or sent back for reworking. According to unofficial information, CXMT began its own HBM3E development back in 2024, and the finished chips will be more expensive than those of foreign competitors. Cost pressures have already affected the market: Huawei, Cambricon, MetaX, and Iluvatar CoreX previously raised prices on their AI accelerators by 20–50% due to rising memory costs, complicating volume expansion plans.

Characteristics and Lag Behind Leaders

In terms of technical parameters, CXMT's HBM3E is, according to Reuters sources, closer to SK hynix's basic HBM3 than to the same manufacturer's more advanced HBM3E. The company offered clients two chip variants—standard and updated, featuring modifications to improve yields. HBM is created by vertically stacking chips on top of each other, providing high-speed data exchange with processors, which is critical for training and inference of large language models. Meanwhile, in July Samsung announced the expansion of HBM sales and the delivery of HBM4E samples to key clients, highlighting that CXMT lags behind recognized leaders by at least one generation.

Market Positions and Broader Context

At the end of Q2, SK hynix accounted for 50% of global HBM sales revenue, Samsung about 33%, and Micron approximately 18%. In the same quarter, CXMT captured 10% of the global DRAM market, becoming the fourth-largest supplier of traditional memory chips. Due to US sanctions, the company cannot acquire advanced manufacturing equipment, making it difficult to close the technological gap. Nevertheless, CXMT demonstrates momentum: less than a year after mastering LPDDR5, it announced the start of mass production of LPDDR6, beating recognized leaders on timelines. The launch of HBM3E, even with a high defect rate, cements China's status as a participant in the race within the memory industry's most complex segment.