China is seeking to expand its foothold in PC production and the advanced memory supply chain amid a memory supply shortage triggered by artificial intelligence.
Global PC manufacturers are shifting some production back to China to cut costs, while Chinese memory makers are pushing ahead with HBM (High Bandwidth Memory) production despite low yields. The supply shortages that have fueled a boom for Samsung Electronics and SK hynix are also opening market entry opportunities for Chinese firms.
According to foreign media reports on Thursday, HP, ASUS, and Acer are moving part of their PC production volumes from Thailand and Vietnam to China.
Citing industry sources, Nikkei reported this and added that Dell is also considering a similar plan. This marks a partial reversal of the "China Plus One" strategy, which had dispersed production bases in response to U.S.-China tensions, now driven by cost pressures.
The shift aims to reduce production and logistics costs as rising memory and storage prices have increased the burden on core component costs.
According to TrendForce, the combined bill of materials for CPUs (Central Processing Units), DRAM, and SSDs (Solid State Drives) in a $900-class laptop reached approximately 68% in the third quarter of this year. The share of notebook production outside China is projected to decline from about 24% last year to 21% this year, and potentially fall below 20% next year.
Chinese contract manufacturers are also aiming to expand their order books. According to Nikkei, while major ODM (Original Design Manufacturer) firms in Taiwan focus on AI servers, Chinese companies are offering incentives such as waivers for initial development costs and mold fees. Access to the supply chain for Chinese-made memory is also cited as a competitive factor.
Expanding production in China does not necessarily mean a decrease in Korean-made memory. However, if the adoption of Chinese components through local ODMs increases, it will provide Chinese memory makers with an opportunity to broaden their customer base. For Korean firms, changes in actual component supply lines are more important than the location of assembly.
In advanced memory, supply shortages and U.S. export controls are heightening China's need for domestic production. Citing sources, Reuters reported that CXMT (ChangXin Memory Technologies), China's largest DRAM maker, has delivered HBM3E samples to domestic AI semiconductor design firms. The sources said limited production is expected to begin within the next two months.
CXMT's HBM3E yield is reportedly around 20% to 30%. Although the proportion of products meeting specifications is low and prices are expected to be higher than comparable products from overseas competitors, the company is pushing forward with production.
Since the U.S. tightened export controls on certain advanced HBM to China in December 2024, Chinese AI semiconductor firms have struggled to secure supply volumes.
A technological gap remains. A Reuters source said that test performance of CXMT's products was closer to HBM3, the previous generation, than to SK hynix's HBM3E. It is difficult to say that Korean firms' competitiveness has been matched solely by pushing for limited production.
What Korean firms should watch is what happens after the initial adoption of Chinese-made memory. If customers who tested Chinese products due to supply shortages confirm quality and supply stability, they may increase purchase volumes. This means that even if the current technological gap is significant, supply shortages could give Chinese firms the opportunity to pass customer validation and expand transactions.
in TECH
