China's CXMT to start HBM3E output despite yields of just 20-30%, sources say

China's ChangXin Memory Technologies (CXMT) plans to start production of HBM3E, an advanced type of high-bandwidth memory chip used with AI processors, despite only about two to three in ten chips coming off its production line meeting specifications, Reuters reported on October 28. Two people familiar with the matter said CXMT has sent HBM3E samples to several domestic AI chip designers and expects to begin limited production over the next two months.

A wide yield gap — and why produce anyway

Yield is the share of chips coming off a production line that meet specifications. The sources put CXMT's HBM3E yield at only about 20% to 30%, compared with around 70% at South Korea's SK Hynix, the market leader. Reuters says the decision highlights China's intense shortage of AI memory chips, which are essential to a government-backed push to develop domestic alternatives to Nvidia's AI processors at scale amid US curbs on access to foreign-made technology.

Background and responses

High-bandwidth memory is made by vertically stacking memory chips so they can exchange data rapidly with AI processors. It is a crucial component in the specialized chips used to train and run large language models. Washington tightened export controls on certain advanced HBM products bound for China in December 2024; the sources said Chinese chipmakers have increasingly sought the memory through unofficial channels, where it can cost several times more. CXMT is China's largest maker of DRAM, the conventional memory used in computers and servers. The Information first reported CXMT's HBM3E plans; Reuters is reporting details about the product yields and delivery timeline for the first time. CXMT did not respond to a request for comment, and SK Hynix did not immediately respond on the yield estimate; the sources declined to be identified because the plans are not public.