China's ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies (YMTC) are moving to expand production capacity using funds secured through initial public offerings. The move is expected to inevitably affect the commodity memory market that has been led by Samsung Electronics and SK Hynix.

Industry estimates on Aug. 26 show CXMT's DRAM production capacity rising from 300,000 wafers a month in the fourth quarter of this year to 500,000 to 600,000 wafers a month in the fourth quarter of 2028. YMTC's NAND flash production capacity is also set to expand over the same period to 400,000 to 500,000 wafers a month from 200,000.

The pace of increase is already widening. Kiwoom Securities put CXMT's 2026 DRAM bit growth forecast at 48%. That is about double Samsung Electronics' 24%, Micron's 27% and SK Hynix's 30%. Based on shipments, CXMT is also at 50%, exceeding Samsung Electronics' 27%, Micron's 25% and SK Hynix's 22%.

China's EET China reported CXMT's first-quarter 2026 revenue at 50.8 billion yuan, and net profit at 33.011 billion yuan. That is 1 year after it posted its first annual net profit of about 400 billion won last year.

Semiconductor analysis firm SemiAnalysis forecast CXMT's first-quarter operating margin at about 70% and its full-year 2026 revenue at $50 billion. It said CXMT would rise to third in DRAM by the end of 2026, overtaking Micron with capacity of 350,000 wafers a month, and reach a 17% market share in 2028. Hyundai Motor Securities said CXMT plans to use funds raised via its IPO to optimise yields for server DDR5 and LPDDR5X and to develop DDR6.

YMTC's first-quarter 2026 revenue is 47.042 billion yuan, and net profit is 33.379 billion yuan. Its NAND gross margin is 78.73%. The average NAND selling price in the first quarter rose 172.72% versus the full year last year. That was the result of reduced supply of consumer NAND as Samsung Electronics, SK Hynix and Micron focused production on AI-focused HBM and enterprise storage devices.

CXMT and YMTC allocate expansion funding as soon as they secure capital

YMTC's market share is expected to keep increasing. YMTC's parent, CCSH Corp, has entered the IPO process. Of the 33 billion yuan to be raised through the IPO, it allocated 20.8 billion yuan to upgrade mass production line technology and 12.2 billion yuan to research and development. Kiwoom Securities forecast YMTC would fully operate its Wuhan plants 1 and 2 in the third quarter to reach a 15% market share.

The two companies' penetration is emerging first in the commodity product lineup. Kiwoom Securities said CXMT has continued developing new products through equipment localisation and succeeded in entering the PC and server market with LPDDR5 and DDR5. It also forecast Chinese memory module makers would increase launches of finished products using CXMT products.

A gap remains in high value-added areas. SemiAnalysis put CXMT's HBM production capacity at about 5,000 wafers a month and cited it as its biggest weakness. HBM is memory that boosts data processing speed by stacking multiple layers of DRAM. SemiAnalysis forecast this capacity would increase to 100,000 wafers a month in 2028.

South Korean companies are responding with process transitions. Kiwoom Securities said Samsung Electronics is proceeding with a 1c-nanometre transition by adding 70,000 wafers a month at its Pyeongtaek Plant 4 and 30,000 wafers a month at existing plants. SK Hynix is adding 60,000 wafers a month at M15X and also switching to 1c-nanometre. Micron opted for 1b-nanometre and 1-gamma process transitions.

An industry official said, "In the long term, Chinese companies' market share in the commodity memory market will rise further." The official added, "For Korean companies, a way to protect profitability is to speed up advanced process transitions to produce more chips from the same wafer and lower costs."