China's CXMT Pushes Into NAND as Samsung, SK Hynix Lead; Solidigm Weighs US Plant [Tech Log]

CXMT pushes into the NAND market

Signs of a shift in NAND production footprint

Solidigm weighs US production

A NAND shortage driven by artificial-intelligence servers, combined with US-China technology tensions, is stirring competition and reshaping the manufacturing footprint in the NAND market, where Samsung Electronics leads. On the same day reports said Chinese memory chipmaker CXMT was seeking to expand beyond DRAM into NAND flash, news also emerged that Solidigm, an SK Hynix unit, is reviewing a plan to build a NAND plant in the US.

"CXMT Eyes NAND Entry; Solidigm Weighs US Plant"

The NAND production landscape could be in for a shake-up, industry officials said on September 20. Reuters reported on September 18 that CXMT is building a NAND research-and-development production line at a new factory under construction in Beijing. It has also set up a research institute there for a NAND development project. CXMT has discussed its NAND business plans with customers, including a startup planning to use its NAND in storage products for AI systems and supercomputers. The move would mark an expansion beyond the company's traditional focus on DRAM.

If CXMT enters commercial mass production, it would face not only global incumbents such as Samsung Electronics, SK Hynix and Micron, but also YMTC, China's leading NAND maker. China's memory market has until now largely been divided between CXMT in DRAM and YMTC in NAND. But YMTC also sounded out a move into DRAM in April by sending low-power DRAM samples to customers. The lines between China's two biggest memory makers are beginning to blur.

While China showed signs the same day of trying to add more NAND suppliers, the US was seeing the opposite shift. Solidigm, SK Hynix's US-based subsidiary, is reviewing a new NAND plant in the country. The project is separate from discussions between SK Hynix and Intel on producing memory at Intel's Ohio plant. SK Hynix said it is considering various options, but nothing has been finalized.

Solidigm's only NAND production facility now is its plant in Dalian, China. A US plant would reduce dependence on that Chinese production base while helping spread risks tied to potential US tariffs and restrictions on exports of semiconductor manufacturing equipment to China. As Chinese memory makers rapidly expand capacity, the US government is pressing foreign chipmakers, including SK Hynix, to increase manufacturing in America. Where production is located affects not just costs, but also trade and regulatory risk.

AI Server Expansion Fuels Surge in NAND Demand

Rising AI-driven memory demand is a key backdrop to CXMT's NAND push and Solidigm's supply-chain diversification. In the NAND market, enterprise solid-state drives, or eSSDs, are a major source of demand growth. These products use NAND to store the vast volumes of data processed by AI servers.

The market's scale is visible in the numbers. TrendForce said on September 1 that combined second-quarter revenue for the top five eSSD suppliers reached about $37.59 billion, up 103.6% from the previous quarter. That was more than a doubling in three months. Higher shipments and rising contract prices appear to have driven the increase. TrendForce said broader adoption of generative AI agent services, data-center infrastructure buildouts by cloud service providers and shipments of Nvidia's GB-series AI server racks are lifting eSSD demand.

Demand is rising rapidly, but supply is not keeping up. Memory makers are prioritizing capital spending on DRAM and high-bandwidth memory, or HBM, limiting additions of new NAND capacity. As demand for AI-server eSSDs rises while supply remains constrained, NAND suppliers have gained more pricing power. TrendForce expects the NAND shortage to ease only in the second half of next year.

Supply shortages can boost earnings for established suppliers, but they can also draw in new competitors. Based on second-quarter NAND revenue compiled by TrendForce, Samsung Electronics held a 29.3% market share, followed by the SK Hynix group, including Solidigm, at 18.2%, and Micron at 15.1%. Samsung remained the market leader, but if CXMT succeeds in commercial mass production, incumbent suppliers could be forced to give up part of the market to a new entrant.

Korean Companies Rank No. 1 and No. 2 in AI-Server eSSDs

Korean companies have a strong presence in eSSDs for AI servers. In the second quarter, Samsung Electronics ranked first in eSSD revenue share with 35.1%, followed by SK Hynix at 21.1%. Micron was next at 17.1%. Samsung sharply increased shipments of its 176-layer QLC products and expanded the share of high-performance PCIe 5.0 products. Its ability to supply both DRAM and NAND has also helped it win server customers in North America. SK Hynix has been increasing shipments of its 321-layer TLC products while boosting sales of Solidigm's ultra-high-capacity QLC eSSDs.

As AI expands, the competitive calculus around the NAND market is becoming more complex. China is trying to use the supply shortage as an opening, with CXMT pushing into NAND, while SK Hynix is reviewing ways to diversify a production network concentrated in China by adding US manufacturing. Samsung, the market leader, must defend its position in AI storage while watching for increased supply from Chinese rivals. TrendForce said capacity expansion by Chinese companies and growth in China's cloud market could reshape competition in the eSSD market.

Still, the market is not yet at the point of an immediate power shift. The start date for CXMT's NAND R&D line has not been confirmed. It also remains unclear whether the effort will move beyond research, development and pilot production into large-scale commercial output. Solidigm has not laid out a detailed blueprint for US investment, either. Semiconductor fabrication plants typically take years to begin operations, and high US manufacturing costs remain a burden. Whether AI and memory demand will remain this strong by the time a plant is completed is another variable.

Kim Dae-young, Hankyung.com reporter kdy@hankyung.com