China's CXMT to start advanced AI memory production despite poor yields, sources say

What happened

China's CXMT plans to start production of HBM3E, an advanced high-bandwidth memory chip used with AI processors, despite only about 20% to 30% of its chips being usable. It has sent samples to domestic AI chip designers and expects limited production within two months.

Confirmed

Global impact / market context

Low yields mean most chips made are wasted, raising the cost of each usable chip and slowing output. Still, starting production supports China's push for domestic AI memory alternatives to foreign suppliers amid US technology restrictions, which matters for chip designers and investors.

Analyst inference

HBM is a bottleneck for AI processors, and market leader SK Hynix reports yields around 70%, far above CXMT. A 20% to 30% yield implies higher unit costs and limited volumes, so China's AI chip ambitions may depend on how fast CXMT improves manufacturing.

Analyst inference

What to watch

1. CXMT expects to begin limited HBM3E production over the next two months, a timeline investors can track for signs of execution. Confirmed
2. Watch whether CXMT improves yields from about 20% to 30% toward SK Hynix's roughly 70%, because higher usable output would lower cost per chip. Proposed
3. Track adoption by domestic AI chip designers receiving samples, since their orders would show whether CXMT's memory can reduce reliance on foreign suppliers. Analyst inference

Evidence

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