Memory Boom in Data Centers Bottlenecks in DRAM and HBM: Tailwind for China's Memory Industry

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Wuxi InfiMotion Technology Co., Ltd.

For the construction of AI data centers, so many DRAM memory chips are needed worldwide that there are no longer enough left for manufacturers of smartphones and computers. The current situation gives Chinese manufacturers like CXMT a boost.

The demand for memory chips for AI data centers has been skyrocketing for some time. This is partly causing a shortage of availability for manufacturers of consumer electronics. HP, one of the largest laptop manufacturers in the world, is therefore considering purchasing in China for the first time. This is reported by the Chinese tech portal Kuai Keji, citing a report from Bank of America.

Tae Kim, an analyst at Barron's, had previously quoted from the report on social media. Allegedly, HP is considering incorporating Chinese memory chip manufacturers into its supply chains. However, due to fears of new boycotts from Washington, these potential supplies are reportedly intended only for the Asian and European markets. It was stated that HP has not yet made a final decision on this.

Several media outlets in China and Asia speculate that the Chinese manufacturer CXMT could benefit from this situation and receive a large order from HP. "The PC giant HP plans to source DRAM directly from ChangXin Memory Technology (CXMT)," writes Kuai Keji.

Memory Market Under Pressure

Currently, the global DRAM market is dominated by three companies: Samsung and SK Hynix in South Korea, as well as Micron Technology in the USA. Together, these three companies hold about 90 percent of the global market for DRAM, which stands for "Dynamic Random Access Memory" and is now needed in large quantities in data centers.

However, all three major providers are currently focusing on the more lucrative market for data centers. Moreover, Micron is withdrawing from the consumer electronics market and has discontinued the Crucial end-consumer brand.

It has become difficult to order enough of these products, even for major players like HP. This development has been driving the prices for both DRAM, used in main memory, and the faster HBM (High Bandwidth Memory) on the global market sharply upward since the beginning of this year.

Particularly in the first ten days of this year, prices have risen sharply, reaching the highest level since 2018, reports the Chinese financial newspaper Xinlang Caijing. "I have been in this industry for a long time," said Jeff Clarke, COO of Dell, in December 2025 to a reporter from Wired magazine, and this "is the worst supply shortage I have ever seen."

DRAM Made in China

CXMT, now the largest Chinese manufacturer of memory chips, was founded in 2016 after a Chinese state-owned enterprise failed in its attempt to acquire Micron. The city government of Hefei decided that a domestic Chinese DRAM manufacturer was needed.

The state capital providers, who aim to reduce their country's dependence on unreliable foreign suppliers in the long term, have a lot of patience. So far, CXMT has been allowed to incur significant annual losses in order to invest in research and development as well as high-quality production facilities. In the meantime, CXMT has caught up technologically with foreign competitors. The recently introduced DDR5 DRAM by the company is said to be on par in quality with those of the "Big Three," according to analysts.

Major Chinese customers like Alibaba Cloud, Tencent, and Xiaomi have been using CXMT's memory products for quite some time. Recently, the company also filed for an IPO in Shanghai, aiming to raise the equivalent of around half a billion euros in capital. These funds are planned to be invested in further R&D and massive capacity expansion.

For the city government of Hefei in China's Anhui province, which has positioned itself as an active industrial investor, this would not be the first successful technology exit. Hefei had already achieved high profits through strategic investments in the display manufacturer BOE and later in the struggling electric car producer NIO. (sb)