Hyundai Motor Securities in Korea has just dropped several shocking pieces of news.
Review of Japanese and Taiwanese companies
Chinese Foundry Companies Entering the Market with 6 New Companies in addition to the Existing 3 / SMIC's 5mm Products to be Produced by Huawei, Sicarrier
Mass production through collaboration
5nm products are likely to be installed in Huawei's new inference chip, Ascend 910C/This product may also be installed in HBM2e, etc.
CXMT succeeded in developing the 15nm process and started mass production of LPDDRS products, etc. CXMT prepares for mass production of HBM3e in 2027
YMTC plans to enter the DRAM market through mass production of LPDDR5 products in 2026
A new DRAM company other than CXMT is expected to emerge in China
Deepseek, self-driving cars, robotics, and foldable smartphones are all being completed at a level that far exceeds market expectations, and the growth of Chinese semiconductor companies is also exceeding market expectations. In particular, Chinese foundry companies have all built 12-inch fabs with a monthly capacity of 10K-60K due to the difficulty in securing 8-inch equipment amid the continuous establishment of new companies. Since products that would be made on an 8-inch scale are being made on a 12-inch scale, they are being supplied at a 20-30% discount compared to Taiwanese and Korean industries. In the case of Korean and Taiwanese 8-inch foundry companies, even if they turn a profit due to low depreciation expenses, it seems inevitable that they will incur an EBITDA deficit in the near future. In addition, SMIC is mass-producing 7nm products on the N+2 process using DUV, and recently it is making 5mm products through a +3 plant. Of course, since they are making 5mm with DUV, not EUV, the defect rate is high, and the eastern part has a negative effect on price competitiveness, but they are offsetting this with government subsidies, so China's move cannot be taken lightly. It appears that 5mm products are being produced through collaboration with equipment companies called SMIC, Huawei Hisilicon, and Sicamer.
SMIC's 7nm Capa is estimated at 10K per month, and Som Capa at 5K per month. The amount of semiconductors supplied is also limited due to low cost. The main products are understood to be Kirin 90005 supplied to Huawei smartphones and Ascend 910B, an inference semiconductor. In particular, Ascend 910B was used as DeepSeek's inference service chip. Meanwhile, it seems that it will be applied to the 5m Ascend 910C, which is currently being ramped up. There are rumors that Ascend 910C will be equipped with HBM2. This is because it is difficult to secure HBM3 due to US sanctions.
However, since Chinese DRAM companies are developing HBM3 and HBM2, it seems that Chinese HBM will be mounted on the Hanwei Ascend Series within the next 2-3 years. Currently, Chinese DRAM companies are rapidly encroaching on the market centered on LPDDR4 by CXMT. It is estimated that 85% of CXMT's production is LPDDR4, and Korean DRAM companies are rapidly leaving the LP DDR4 market. CXMT is currently known to have succeeded in developing a 15cm process and is producing LPDDR5 (16Gb) and PC DDR5 (16Gb) products, and is planning to mass produce HBM3 in 2026 and HBM3 in 2027. Of course, even if CXMT mass-produces HBM, the possibility of Chinese HBM being mounted on AI Servers, where information security issues are important, is slim. In addition, due to US sanctions, Korean companies are unable to directly supply HBM3 to China. Given that Chinese companies are indirectly supplying HBM to NVIDIA H20, the impact of Chinese companies’ mass production on Korean companies is expected to be minimal. Meanwhile, during our visit to Taiwan Supply Chain, we were able to confirm companies in China that are preparing to enter the DRAM market for the first time. For example, YMTC, which succeeded in mass producing 294 layers in the 3D NAND market through its unique technology called Xtacking, is preparing to enter the DRAM market. YMTC is understood to be planning to mass produce LPDDR5 products in 2006. In particular, although XMC, a subsidiary of YMTC, is a foundry company, it is likely that YMTC will enter the HBM market in the future as it has good TSV technology.
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