Samsung Leads CXMT by Up to Seven Years in DRAM Technology

Samsung Electronics holds a technology lead of up to seven years over China’s CXMT in DRAM mass production, according to KB Securities, which said market concerns over China’s technological catch-up are overblown. An analysis suggests that Samsung Electronics holds a lead of up to seven years over China’s Changxin Memory Technologies (CXMT) in DRAM process technology, based on mass production timelines. According to the assessment, market concerns over China’s technological catch-up have been excessively reflected in Samsung’s share price, despite the company’s overwhelming advantage in process competitiveness and mass production capabilities. Kim Dong-won, head of research at KB Securities, said in a report released on Oct. 15 that investors should focus on Samsung Electronics’ pace of technological innovation and the industry’s high barriers to entry. According to KB Securities, Samsung began mass production of the 1z process, CXMT’s mainstay technology, in September 2019. Samsung also began mass-producing the 1a process in October 2021, approximately five years before CXMT started mass production of the same process in September 2026. KB Securities also assessed that next-generation technologies recently unveiled by CXMT, including its 4F² DRAM architecture, may face limitations in translating technological advances into actual market share. Commercialization requires not only competitive performance, yields and costs but also customer qualification and proven high-volume manufacturing capabilities. In particular, Samsung had already announced related technology in 2023 through the implementation of vertical-channel transistors for 4F² DRAM. However, a commercial market has yet to emerge due to a lack of demand. This is why advances by Chinese manufacturers are unlikely to translate immediately into a direct competitive threat to Samsung, according to the analysis. The core competitiveness of the memory semiconductor industry depends not simply on developing new processes but also on securing stable yields and the ability to sustain high-volume production. While CXMT remains focused on refining its existing processes, Samsung is concentrating on advancing next-generation leading-edge processes and high-bandwidth memory (HBM) technology. Samsung is expected to maintain its technological lead over Chinese competitors, supported by its accumulated experience in mass-producing advanced processes and securing customer qualification. KB Securities projected that China would have limited scope to narrow the technology gap significantly. Samsung shares have fallen 16% so far in October as concerns over China’s technological catch-up have weighed on the stock. Its current price-to-earnings ratio (PER) stands at approximately 3 times, a level that securities analysts view as historically undervalued. Kim also highlighted expectations for shareholder returns through increased dividends and share cancellations. Given the company’s potential for higher corporate value, he assessed the current share price correction as an opportunity for investors to increase their exposure to Samsung Electronics.