China's growing semiconductor industry is increasing concern in South Korea as Chinese producers expand output and gain market share. Samil PwC, the South Korean member firm of the global consultancy, released a report on Monday urging local chipmakers to protect profitability. Samil PwC expects competition from China to intensify first in conventional memory, mature-node manufacturing, and packaging and testing.
Samil PwC urged South Korean semiconductor companies to improve cost competitiveness in commodity memory and increase investment in advanced packaging and high-bandwidth memory (HBM). These technologies support stacked configurations used with AI processors. The consultancy said China remained behind in these advanced segments because customer validation and reliable mass production with high yields remained obstacles.
SK Group chairman Chey Tae-won said earlier this month that ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies Co (YMTC) were quickly narrowing the technology gap. Yonhap News Agency reported that Chey warned South Korea could lose market share if Chinese competitors or US rival Micron Technology increased capacity faster. Chey also questioned whether US-led export restrictions were effective, pointing to continued progress by CXMT and YMTC despite years of technology restrictions.
Reuters reported last week that Samsung Electronics and SK Hynix were upgrading factories in China to manufacture more advanced NAND flash memory. Reuters said the upgrades aimed to counter YMTC and satisfy storage demand driven by AI. Reuters, citing unnamed sources, reported that Samsung was modifying the Xian factory to make 286-layer chips. Reuters reported that SK Hynix was preparing the Dalian factory to manufacture chips with at least 240 layers. Samsung and SK Hynix both said the companies had consulted Washington about the upgrades.
CXMT, China's leading dynamic random-access memory (DRAM) producer, announced earlier this month that CXMT plans to introduce server memory using advanced 4F² architecture by the end of this year. The design increases density by reducing the space between memory cells. Samsung and SK Hynix are also developing the design.
Counterpoint Research said CXMT accounted for 10% of global DRAM revenue in the second quarter, more than twice the 4% recorded a year earlier. Counterpoint ranked CXMT fourth worldwide, behind Samsung, SK Hynix and Micron Technology.
YMTC placed third worldwide by NAND shipment volume in the second quarter. Only Samsung and SK Hynix, including SK Hynix's US-based subsidiary Solidigm, ranked ahead of YMTC. YMTC increased its share of worldwide NAND revenue to 14% in the first quarter of this year, compared with 9% a year earlier.
Counterpoint projected earlier this month that server-related business could generate nearly 39% of YMTC's total revenue by 2028, compared with virtually zero in 2024. Counterpoint linked the projected increase to YMTC's expansion into storage for AI data centres. Counterpoint research director MS Hwang said higher prices and increased domestic orders were benefiting YMTC. Hwang described enterprise storage as a profitable opportunity arising from AI demand. However, Hwang said attracting international customers outside China would remain a crucial test of YMTC's ability to challenge Samsung globally.
Chinese Chipmakers Gain Ground, South Korea Urged to Strengthen Semiconductor Lead
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Summary
Chinese chipmakers are gaining traction, with South Korean analysts urging local firms to respond. Altcoins to watch may reflect market sentiment as fear and greed index signals shifting investor confidence. Samil PwC warns Chinese firms are closing in on South Korea in memory and packaging. Samsung and SK Hynix are upgrading Chinese plants to counter Yangtze Memory. CXMT is expected to boost DRAM revenue share to 10% by 2026.
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