Samsung and SK Hynix Upgrading China Factories to Counter CXMT and Meet AI Demand

Samsung Electronics and SK Hynix are upgrading their manufacturing plants in China to produce more advanced memory chips, according to people familiar with the matter. The move is designed to fend off intensifying competition from CXMT, China's fast-growing domestic memory champion, while also capturing surging demand from the artificial intelligence sector.

The push comes roughly a week after CXMT rattled global memory markets by announcing progress on a 4F2 memory-cell architecture capable of higher storage density, a claim that sent Samsung and SK Hynix shares down more than 3% each on October 13. CXMT president Cao Kanyu said at a Shanghai industry conference that the company planned to launch a new generation of DDR5 server memory modules based on the design before the end of 2026, though analysts noted that shipping a working product differs sharply from achieving the manufacturing yields needed to disrupt global supply at scale.

The China upgrades fit into a broader strategic picture for both South Korean chipmakers, who have also been navigating U.S. export-control pressures and a parallel push from Washington for them to build new factories in the United States. SK Hynix has separately been seeking expanded approval to ship American chipmaking equipment to its China facilities as a condition for agreeing to a U.S. plant, underscoring how intertwined the China and U.S. manufacturing decisions have become.