Samsung, SK Hynix Sink on CXMT DRAM Tease

CXMT semiconductor plant in Hefei (Provided by Yonhap News Agency) ChangXin Memory Technologies (CXMT), China's largest semiconductor company, has thrown down a challenge to the cutting-edge memory market led by Samsung Electronics and SK Hynix by teasing the launch of next-generation server DRAM. While the dominant assessment is that the technological gap between South Korea and China is one to two years for DRAM and more than three years for high bandwidth memory (HBM), market tension is escalating as the presence of a once-distant pursuer has risen to a visible level. According to the semiconductor industry on Oct. 14, the '4F²' technology announced by CXMT is a design method capable of storing more data in the same space. It can reduce the memory cell area by 33% compared to the currently mainstream '6F²' method, and a type of 3D technology that stands transistors vertically is applied to achieve this. As this news broke, the stock prices of Samsung Electronics and SK Hynix reacted sensitively, plummeting 7.39% and 10.09%, respectively, on Oct. 13. Samsung Electronics and SK Hynix have also been researching 4F² technology from early on, but they have not applied it to actual mass-produced products. This is because the technology itself is complex, making it difficult to increase yields, and the resulting risk of rising production costs is high. An industry official explained, "It is not that domestic companies cannot make it due to a lack of technology, but rather that they have been contemplating the timing of mass production in terms of securing stable yields and cost competitiveness." In contrast, CXMT has seized the current situation, where memory prices have surged due to expanding artificial intelligence (AI) demand, as an opportunity. Although the production costs of Chinese companies are still higher than those of South Korea, the overall rise in market prices has created a structure in which they can generate profits even with high costs. It is interpreted that the judgment that 4F² technology will serve as an important bridgehead at a time when DRAM design is transitioning to 3D also played a role. Some analysts suggest that CXMT's announcement is somewhat exaggerated marketing. CXMT did not disclose specific specifications or a release timeline for the products applying the technology. Shin Seung-yoon, a researcher at Hanwha Investment & Securities, diagnosed that there is a difference of 1.5 to 2 generations in technological level, stating, "While Samsung Electronics plans a complete introduction below the 10-nanometer class, CXMT is estimated to be at the level of partially applying it to the 12-nanometer class." The United States' export restrictions on China also act as a factor holding CXMT back. This is because it is difficult to maximize mass production efficiency without securing ASML's extreme ultraviolet (EUV) lithography equipment, which is the core of improving semiconductor yields. Kim Byung-yeon, a researcher at NH Investment & Securities, forecasted that it is realistically difficult to narrow the technological gap with Samsung Electronics and SK Hynix or resolve the current supply shortage in the short term. Nevertheless, it is difficult to deny the fact that China's research and development (R&D) capabilities are rapidly chasing South Korea. Ahn Ki-hyun, senior executive director of the Korea Semiconductor Industry Association, emphasized the need to further accelerate the pace of technological development to maintain the top position, stating, "China, which was once at a level where we did not even know where they were, is now at a visible level of following right behind us." In the field, it is pointed out that institutional supplements are necessary to maintain technological competitiveness. Senior Executive Director Ahn added that measures such as an exception to the 52-hour workweek for semiconductor research positions must be supported so that skilled research personnel can intensively produce results. The speed of the joint response by the private and public sectors to maintain the technological gap is expected to determine the future direction of memory leadership.