Chinese companies advance production of high-bandwidth memory for AI chipsets

By Fanny Potkin and Eduardo Baptista

SINGAPORE/BEIJING (Reuters) – Two Chinese chipmakers are in the early stages of producing high-bandwidth memory (HBM) semiconductors used in artificial intelligence chipsets, according to sources and documents.

Progress on HBM – even if only on older versions of HBM – represents a major step forward in China’s efforts to reduce its dependence on foreign suppliers amid tensions with Washington that have led to restrictions on US exports of advanced chipsets for Chinese companies.

CXMT, a leading Chinese DRAM chip maker, developed HBM chip samples in partnership with chip packaging and testing company Tongfu Microelectronics, according to three people briefed on the matter. The chips are being shown to customers, two of them said.

In another example, Wuhan Xinxin is building a factory that will be capable of producing 3,000 12-inch HBM wafers per month, with construction expected to begin in February this year, documents from corporate database Qichacha show.

CXMT and other Chinese chip companies have also been holding regular meetings with South Korean and Japanese semiconductor equipment companies to buy tools to develop the HBM, two people said.

The sources were not authorized to speak on the matter and declined to be identified. Hefei-based CXMT or ChangXin Memory Technologies and Tongfu Microelectronics did not respond to requests for comment.

Wuhan Xinxin, which has signaled to regulators that it is interested in going public, and its parent company did not respond to requests for comment. The parent company is also the parent company of NAND memory specialist YMTC or Yangtze Memory Technologies. YMTC said it did not have the capacity to mass produce HBM.

Both CXMT and Wuhan Xinxin are private companies that have received funding from the local government to develop technologies as China invests capital in developing its chip sector.

Wuhan’s local government also did not respond to requests for comment.

Separately, Chinese tech giant Huawei – which the US considers a threat to national security and is subject to sanctions – aims to produce HBM2 chips in partnership with other domestic companies by 2026, according to one of the sources and a separate person with knowledge of the matter.

The Report reported in April that a group of companies led by Huawei that intends to manufacture HBM includes Fujian Jinhua Integrated Circuit, a memory chip maker also under US sanctions.

Huawei, which has seen demand for its Ascend AI chips soar, declined to comment. It is unclear where Huawei acquires HBM. Fujian Jinhua did not respond to a request for comment.

LONG JOURNEY AHEAD

HBM – a type of DRAM standard first produced in 2013 in which chips are stacked vertically to save space and reduce power consumption – is ideal for processing large amounts of data produced by complex AI applications and demand has increased in amid the AI ​​boom.

The HBM market is dominated by South Korea’s SK Hynix – until recently the sole HBM supplier to AI chip giant Nvidia, according to analysts – as well as Samsung and, to a lesser extent, US company Micron Technology. All three manufacture the latest standard – HBM3 chips – and are working to bring fifth-generation HBM or HMB3E to customers this year.

China’s efforts are currently focused on HBM2, according to two of the sources and another person with direct knowledge of the matter.

The US has not imposed restrictions on exports of HBM chips per se, but HBM3 chips are made using American technology, which many Chinese companies, including Huawei, are blocked from accessing as part of the restrictions.

Nori Chiou, chief investment officer at White Oak Capital and a former analyst who analyzed the IT sector, estimates that Chinese chipmakers are a decade behind their global rivals in HBM.

“China faces a considerable journey ahead as it currently lacks the competitive advantage to rival its Korean counterparts even in the dominance of traditional memory markets,” he said.

“However, (CXMT’s) collaboration with Tongfu represents a significant opportunity for China to enhance its capabilities in both memory and advanced packaging technologies in the HBM market.”

Patents filed by CXMT, Tongfu and Huawei indicate that plans to develop HBM domestically date back at least three years, when China’s chip industry increasingly became a target of US export controls.

CXMT has registered nearly 130 patents in the United States, China and Taiwan for different technical issues related to the manufacturing and functionalities of HBM chips, according to Anaqua’s AcclaimIP database. Of these, 14 were published in 2022, 46 in 2023 and 69 in 2024.

A Chinese patent, published last month, shows that the company is pursuing advanced packaging techniques, such as hybrid bonding, to create a more powerful HBM product. A separate document shows that CXMT is also investing in developing the technology needed to create HBM3.

(Reporting by Fanny Potkin in Singapore and Eduardo Baptista in Beijing; additional reporting by Heekyong Yang and Joyce Lee in Seoul; editing by Brenda Goh and Edwina Gibbs)