We thought that the Chinese RAM manufacturers came to relieve the market. Turns out they’re playing the same game as everyone else.

When the market is shared by a few, you can’t expect popular prices. The RAM memory segment is dominated by three manufacturers (Micron, SK Hynix and Samsung) and, with most of its production focused on the AI ​​market, the consumer segment is in deep water. In a scenario in which there are simply no chips, the Chinese RAM memory companies seemed like a ball of oxygen.

The reality seems somewhat different.

Hunting in China. Giants like Asus, Lenovo or Apple have been around for some time knocking on the doors of Chinese companies of RAM memory. Although traditionally it was the two South Korean companies (Samsung and SK Hynix) and the American Micron that supplied RAM to both manufacturers and assemblers, with the current component crisis those companies have been left orphaned and have had to look to the Chinese market.

CXMT and YMTC (which is the counterpart of flash memory) are the two proper names of Chinese RAM and in recent years they have been making advances to catch up with consumer chips. There are those who believe that they are not suitable for high-end products, but when the need arises, expectations relax. That is why both have consolidated as a juicy element to alleviate the marketbut it turns out that they did not come to solve the global crisis, but to play the same game as the big ones.

Bargaining power. As demand increased, both YMTC and CXMT have started selling their products at premium prices. It is that market that regulates itself, one in which everyone is in the same boat and, if they can sell their products at a higher price, they see no need to do so at a lower one (especially when we are seeing stratospheric financial results in this situation). But the most curious thing is that they are selling the most expensive things… to their own business partners.

According to ReutersCXMT has been raising Huawei’s RAM prices for months. Huawei is competing against Nvidia both in the local and global markets, showing its equipment specially designed for a period in which AI inference seems like the next step of this technology, and as pointed out in Reuters, when Huawei asked for a relief in prices, CXMT did not give in.

In fact, they point out that a power struggle is taking place with negative consequences for Huawei, since CXMT has been ordering its engineers to leave clean rooms in which they collaborated with partners of the Chinese giant, such as SiCarrier. In fact, it has also been recently commented that Huawei has begun to move to create your own DRAM factory.

The one who warns… It is an interesting twist when it was assumed that Chinese manufacturers would arrive to alleviate the situation, competing with aggressive discounts below the prices of the three that control the market thanks to a growth produced, in part, through government subsidies. By competing with prices below those of the market they would be able to get a juicy piece of the pie among consumer brands, but as we have repeatedly said when we talked about itIn the end what rules is… money.

Whenever it has been reported that someone opened a new plant or that a new research movement was being carried out in NAND chips, we already commented that the product would not be intended to alleviate the situation worldwide in the consumer segment, but for what is most profitable for the manufacturers of these chips: the AI ​​segment. Seeing the record profits of companies like SK Hynix or Samsung, it was naive to think that a company would enter this sector to alleviate the burden of consumer products.

USA with the magnifying glass. Thus, CXMT has become the fourth largest manufacturer of memory worldwide, including the memory that goes into mobile phones and servers for AI, which is giving it brutal bargaining power, enough to put the brakes on a Huawei that has full government trust to become one of the technological engines of the country. However, there is a conflict of interest because Huawei is interested in its hardwarebut where China is also competing globally is in AI, and CXMT has just signed two very juicy agreements in this area.

one with ByteDance for more than 7 billion dollars and another with Tencent for more than 3 billion dollars. Both to supply DRAM chips for data center servers for artificial intelligence. Meanwhile, the United States is seeing a new problem being born, as both CXMT and YMTC have started to get your attention.

YMTC is listed in the ‘EntityList‘ American and Micron is seeing its business in jeopardy, urging Congress to impose stricter controls on CXMT. Interestingly, Apple is advocating the opposite as it desperately needs RAM and CXMT seems like the ideal candidate.

Prepared for the worst. In any case, and as we have said on several occasions, any movement in this direction by the RAM majors will be aimed at producing more chips for hyperscalers. It’s a gigantic market right now that doesn’t seem to have an end or relief in sight.

Samsung has achieved a quarter even better than Nvidia and since SK Hynix has issued a clear warning“Next year will be the worst in the history of the semiconductor industry.” Translation: buy now what you think you will need because there is nothing to indicate that the situation will relax in the short term. And when it happens, there are already manufacturers like Lenovo who point out that prices they will never return to the pre-crisis situation…

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