China’s CXMT Pushes Into NAND as Samsung, SK Hynix Lead AI-Server eSSDs; Solidigm Weighs U.S. Plant [Tech Log]

CXMT pushes into the NAND market

Signs of a shift in NAND production geography

Solidigm weighs U.S. production

A NAND shortage driven by artificial-intelligence servers, combined with U.S.-China technology tensions, is starting to reshape competition and manufacturing footprints in a market led by Samsung Electronics. On the same day reports said Chinese memory maker CXMT was moving beyond DRAM and into NAND flash, news also emerged that Solidigm, an SK Hynix subsidiary, is weighing a NAND plant in the U.S.

"CXMT Pushes Into NAND; Solidigm Weighs U.S. Plant"

The NAND production map could be in for a major shift, according to industry officials on Sept. 20. Reuters reported on Sept. 18 that CXMT is building a NAND research-and-development production line at a new plant in Beijing. The company has also set up a research institute there for a NAND development project. It has discussed NAND business plans with customers, including a startup that plans to use CXMT’s NAND in storage products for AI systems and supercomputers. The move would broaden CXMT’s business beyond its traditional focus on DRAM.

If CXMT reaches commercial mass production, it would compete not only with established global suppliers such as Samsung Electronics, SK Hynix and Micron, but also with YMTC, China’s top NAND maker. In China’s memory market, CXMT has focused on DRAM while YMTC has centered on NAND. But YMTC also tested the waters for a DRAM entry after sending low-power DRAM samples to customers in April. The dividing lines between China’s two biggest memory makers are beginning to fade.

While China showed signs of adding more NAND suppliers, the U.S. was seeing the opposite kind of shift. Reports said Solidigm, the U.S.-based SK Hynix subsidiary, is considering a new NAND plant there. The project is separate from discussions between SK Hynix and Intel on producing memory at Intel’s Ohio facility. SK Hynix said it is reviewing several options, but nothing has been finalized.

Solidigm’s only NAND production site currently is its plant in Dalian, China. A U.S. plant would reduce reliance on that Chinese manufacturing base while also helping spread risks tied to potential U.S. tariffs and restrictions on semiconductor-manufacturing equipment exports to China. As Chinese memory makers rapidly expand capacity, the U.S. government is pressing overseas chipmakers, including SK Hynix, to increase production in America. Where chips are made now affects not only costs, but also trade and regulatory risks.

AI server buildout fuels surge in NAND demand

AI-driven memory demand is a key factor behind CXMT’s NAND push and Solidigm’s supply-chain diversification efforts. In particular, enterprise solid-state drives, or eSSDs, are driving demand in the NAND market. These devices use NAND to store the massive volumes of data processed by AI servers.

The size of the market is clear in the numbers. TrendForce said on Sept. 1 that combined second-quarter revenue for the top five eSSD suppliers reached about $37.59 billion, up 103.6% from the previous quarter. That means revenue more than doubled in three months. The increase appears to have been driven by higher shipments and rising contract prices. TrendForce said broader adoption of generative AI agent services, data-center infrastructure buildouts by cloud service providers, and shipments of Nvidia’s GB-series AI server racks are all lifting eSSD demand.

Demand is rising fast, but supply is not keeping up. Memory makers have prioritized capital spending on DRAM and high-bandwidth memory, or HBM, limiting additions to new NAND capacity. As demand for AI-server eSSDs rises alongside supply constraints, NAND suppliers have gained more pricing power. TrendForce expects the NAND shortage to ease only in the second half of next year.

The supply shortfall gives established suppliers a chance to lift earnings, but it also creates an opening for new rivals. Based on second-quarter NAND revenue tracked by TrendForce, Samsung Electronics held a 29.3% share, followed by the SK Hynix group, including Solidigm, at 18.2%, and Micron at 15.1%. Samsung kept the top spot, but if CXMT succeeds in commercial mass production, incumbent suppliers may have to cede part of the market to a new entrant.

Korean companies rank No. 1 and No. 2 in AI-server eSSDs

Korean companies have a strong presence in eSSDs for AI servers. In the second quarter, Samsung Electronics led with a 35.1% revenue share, while SK Hynix ranked second at 21.1%. Micron followed at 17.1%. Samsung sharply increased shipments of its 176-layer QLC products and expanded the share of high-performance PCIe 5.0 products. Its ability to supply both DRAM and NAND has also helped it win server customers in North America. SK Hynix has expanded shipments of 321-layer TLC products and increased sales of Solidigm’s ultra-high-capacity QLC eSSDs.

As AI expands, the calculations around the NAND market are getting more complex. China is trying to use the supply shortage as an opening for CXMT to enter NAND, while SK Hynix is reviewing ways to diversify a production network concentrated in China by adding capacity in the U.S. Samsung, the market leader, must defend its position in AI storage while also watching Chinese suppliers expand output. TrendForce said capacity growth by Chinese companies and expansion in China’s cloud market could reshape competition in eSSDs.

Still, the market is not yet at the point of a near-term upheaval. The start date for CXMT’s NAND R&D line has not been confirmed. It is also unclear whether the project will move beyond research, development and pilot production into large-scale commercial manufacturing. Solidigm, for its part, has not presented a detailed blueprint for any U.S. investment. Semiconductor plants typically take years to come online, and high manufacturing costs in the U.S. remain a burden. Whether AI and memory demand will still be this strong by the time any plant is completed is another variable.

Kim Dae-young, Hankyung.com reporter kdy@hankyung.com