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SILICON SILIC CHIP www.siliconchip.com.au Publisher/Editor Nicholas Vinen Technical Editor John Clarke – B.E.(Elec.) A self-made trap for RAM manufacturers Printing and Distribution: Computer memory and storage is incredibly expensive by historical standards at the moment, due largely to extremely high demand from AI companies. That’s a whole can of worms in itself – this could be a huge bubble that eventually pops with disastrous consequences – but that’s not what I want to write about at the moment. Rather, I’d like to discuss the rise of Chinese memory manufacturer ChangXin Memory Technologies (CXMT). You may recall that my March 2026 editorial was titled “Expect more Chinese-brand computer parts”, and it seems I was prescient. The point I want to bring up today, though, is how the current major memory manufacturers such as SK Hynix, Micron and Samsung may be digging themselves into a hole from which they could have difficulty escaping. Right now, they are raking in money thanks to very high RAM prices combined with exceptionally strong demand. But those same conditions have also provided an ideal opportunity for CXMT, based in eastern China, to establish itself as a serious competitor. It is now manufacturing DDR5 memory in volume and, with prices where they are, presumably making very good money doing so. Some people had hoped CXMT’s entry into the market in volume would bring prices down. It probably will... eventually. But that won’t happen until supply catches up with demand. What I think will happen is that, at some point, CXMT – and possibly other Chinese memory manufacturers – will ramp up production to the point that RAM prices start to fall. Alternatively, the extraordinary rate of AI data-centre investment may simply prove unsustainable and demand could drop sharply. When that happens, prices could crash to the point where some manufacturers struggle to remain profitable. RAM has historically been a brutally cyclical business, with periods of shortage and high profits followed by oversupply and collapsing prices. CXMT may be particularly well placed to weather the next downturn. It has access to China’s enormous domestic market, a vast manufacturing ecosystem and substantial state support, while it may also be willing or able to tolerate lower margins for longer as it builds market share. That is where the established manufacturers may be setting a trap for themselves. By enjoying today’s high prices and concentrating increasingly on lucrative server memory and HBM (high bandwidth memory), they are giving CXMT an unusually favourable environment in which to improve its technology, increase production and establish customers. By the time the market turns, CXMT could be a much stronger competitor than it is today. And while CXMT’s technology is not quite world-class yet, it certainly seems to be learning quickly. Its products are already quite usable for many applications. I certainly would not turn up my nose at DDR5 DIMMs fitted with CXMT RAM chips if the price was right. I hope Micron, Samsung and SK Hynix are banking some of the money they’re raking in at the moment because, once the next correction arrives, they may need it. RAM has always been an industry of wild swings, but this time there will be a hungry new competitor waiting when the market swings back the other way. 1 Huntingwood Dr, Huntingwood NSW 2148 54 Park St, Sydney NSW 2000 Cover background image: https://unsplash.com/photos/light-blue-to-purple-gradient-PHtp0cDBJSM Technical Staff Bao Smith – B.Sc. Tim Blythman – B.E., B.Sc. Advertising Enquiries (02) 9939 3295 adverts<at>siliconchip.com.au Regular Contributors Allan Linton-Smith Dave Thompson David Maddison – B.App.Sc. (Hons 1), PhD, Grad.Dip.Entr.Innov. Geoff Graham Associate Professor Graham Parslow Dr Hugo Holden – B.H.B, MB.ChB., FRANZCO Ian Batty – M.Ed. Phil Prosser – B.Sc., B.E.(Elec.) Cartoonist Louis Decrevel loueee.com Founding Editor (retired) Leo Simpson – B.Bus., FAICD Silicon Chip is published 12 times a year by Silicon Chip Publications Pty Ltd. ACN 626 922 870. ABN 20 880 526 923. All material is copyright ©. No part of this publication may be reproduced without the written consent of the publisher. Subscription rates (Australia only) 6 issues (6 months): $77.50 12 issues (1 year): $145 24 issues (2 years): $270 Online subscription (Worldwide) 6 issues (6 months): $55 12 issues (1 year): $105 24 issues (2 years): $200 For overseas rates, see our website or email silicon<at>siliconchip.com.au * recommended & maximum price only Postal address: PO Box 194, Matraville, NSW 2036. Phone: (02) 9939 3295. ISSN: 1030-2662 2 Editorial Viewpoint Silicon Chip by Nicholas Vinen Australia's electronics magazine siliconchip.com.au