China's CXMT makes first HBM3E chips, closing AI memory gap

CXMT's entry into HBM3E production marks a significant step for China's semiconductor ambitions. HBM is a critical component for AI processors, and the US export rules have limited China's access to advanced HBM chips from foreign suppliers. By producing even small quantities of HBM3E, CXMT could begin to reduce that dependency, with Alibaba's T-Head and Cambricon already planning to integrate the memory into their products by 2027.

However, the company faces substantial hurdles. The Information reports that CXMT is three to five years behind the leading memory makers, and its yields—estimated at around 25 percent in June by SemiAnalysis—remain low. High yields are essential for cost-effective mass production, and the low figure suggests that CXMT's early HBM3E output will be expensive and limited. The company's $8.6 billion Shanghai IPO raised substantial capital, but the prospectus does not allocate any of it specifically to HBM, which could constrain its ability to scale up quickly.

For now, CXMT's HBM3E is a proof of capability rather than a commercial threat to Samsung, SK Hynix, and Micron, who are already mass-producing the next generation, HBM4. The gap in performance and volume remains wide. Yet the fact that domestic Chinese chip designers are willing to test and adopt CXMT's memory suggests that even a modest domestic supply could begin to ease the constraints imposed by export controls, a development that could reshape the competitive landscape over the long term.