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Micron And The Chinese Dragon

Dec. 09, 2019 1:31 PM ETMicron Technology, Inc. (MU)HXSCF314 Comments


  • ChangXin Memory Technologies has become the first Chinese DRAM company to start mass production.
  • The addition of a fourth large player in the DRAM market could result in depressed prices for years and force consolidations in the industry.
  • I think that if ChangXin successfully bridges the technological gap and becomes a significant DRAM producer, this could lead to the merger of Micron with SK Hynix.
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Almost a year ago. I wrote an article covering Micron (NASDAQ:MU) and the issues of China's ambitious plans to enter the DRAM industry. My conclusion was that Fujian Jinhua Integrated Circuit (JHICC) was in deep trouble and that the plans of other local players such as Innotron Memory and Xi'an UniIC Semiconductors seemed limited and unlikely to have a significant impact on the global DRAM market. Well, it seems I was wrong. ChangXin Memory Technologies (CXMT), formerly Innotron, has recently started to mass produce its homemade DRAM chips.

Memory chips are effectively commodity goods with little differentiation among them and the global DRAM market is dominated by Samsung (OTCPK:SSNLF), SK Hynix (OTC:HXSCF) and Micron. They currently control together almost 95% of the global market.

(Source: DRAMeXchange)

The entry of a new player from China is likely to shake this business.

ChangXin and its ambitions

ChangXin has reportedly invested approximately $21.1 billion into its DRAM project in Hefei in the province of Anhui plus another $2.5 billion injected into research and development. The company recently completed its Fab 1 and R&D facility and is currently producing 20,000 wafers per month. Output is scheduled to double in the second quarter of 2020, although a few months ago some media reported that the company had estimated a production capacity up to 120,000 wafers per month and hoped to deliver them before the end of 2019.

(Source: EE Times)

ChangXin currently is using a 19-nm process technology and is producing LPDDR4, DDR4 8Gbit DRAM products. Many of its competitors already have advanced to the 16nm and 12nm process nodes.

The company was established in 2016 by the Hefei Industrial Investment Fund and GigaDevice and is run by the latter's former president Yiming Zhu. Some 70% of its 3,000 employees are technical staff and ChangXin has

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