China's memory chip company ChangXin Memory Technologies (CXMT) has signed a long-term supply agreement with Tencent for server DRAM worth more than 20 billion yuan ($2.94 billion), Reuters reported on June 29, citing three people with knowledge of the matter.
DRAM is a core memory used by servers to quickly process data needed for software and AI tasks. The deal comes as a global shortage of memory supply has emerged due to an AI boom and as CXMT prepares a 29.5 billion yuan initial public offering (IPO) on Shanghai's Star Market.
As memory makers allocate more capacity to producing high bandwidth memory (HBM), a premium DRAM used in AI data centres, supplies of conventional server DRAM are shrinking.
The deal shows a trend of Chinese big tech firms switching their supply chains to domestic memory producers.
According to The Information, as Samsung Electronics and SK Hynix prioritise HBM production for U.S. technology companies, Alibaba, ByteDance and Tencent are securing supplies from CXMT and Yangtze Memory Technologies.
Chi-gyu Hwang
delight@d-today.co.kr