Sources: CXMT plans to start HBM3E production despite yields of just 20% to 30%; its HBM3E performance is closer to that of SK Hynix's previous-gen HBM3 chips

If you are buying HBM chips for AI development, the HBM3E market will see a new, albeit lower-performing, supplier emerge soon.

CXMT, a Chinese memory chip manufacturer, intends to begin production of HBM3E, a crucial component for AI processors, despite facing significant yield challenges. Sources indicate that current yields for CXMT's HBM3E are reportedly between 20% and 30%. Furthermore, the performance of CXMT's HBM3E chips is said to be comparable to previous-generation HBM3 products from competitors like SK Hynix. This development comes as the demand for high-bandwidth memory, essential for training and running large AI models, continues to surge globally.

CXMT's decision to proceed with HBM3E production, even with low yields, signals an aggressive push to capture market share in the critical AI hardware sector. The company appears willing to accept lower initial profitability and performance to establish a foothold against dominant players like SK Hynix, Samsung, and Micron. This move could introduce price competition into the HBM market, though the performance gap suggests it may initially target less demanding AI applications or customers prioritizing cost over cutting-edge speed.

The low yield rates and performance parity with older technology highlight the steep technical hurdles in advanced memory manufacturing. It also indicates that while China is rapidly developing its domestic semiconductor capabilities, it still faces significant gaps compared to established global leaders in cutting-edge technologies like HBM3E. The market will be watching whether CXMT can improve its yields and performance to become a more competitive player or if its HBM3E offering remains a niche product.