Chinese technology companies are scrambling to stockpile Samsung’s high bandwidth memory (HBM) chips amid fears of US restrictions. The US is reportedly considering using its Foreign Direct Product Rule (FDPR) to ban the sale and distribution of these chips in China on security grounds. As geopolitical tensions between the US and China continue to rise, tech giants like Huawei and Baidu are bolstering their stocks of HBM chips, which are used as AI accelerators.
China has become a significant market for HBM chips, accounting for 30% of Samsung’s HBM chip revenues in the first half of 2024. This demand has been driven by companies like Baidu and Huawei, as well as new startups in China. Most Chinese tech firms are particularly interested in the HBM2E chip, which is one generation behind the latest HBM3 technology. Additionally, China is planning to produce the HBM2 chip locally, which is the most mature but least advanced model.
Market research predicts substantial growth in the global HBM market, with revenues projected to reach $14 billion in 2024 and $37.7 billion by 2029. However, there are differing opinions on the demand for HBM chips, with analysts estimating varying figures. Nonetheless, Chinese firms’ stockpiling of Samsung’s HBM chips has reportedly stimulated China’s overall chip imports in the first seven months of this year.
China is also aiming to ramp up domestic production of HBM chips. ChangXin Memory Technologies (CXMT) has reportedly started producing HBM2 chips, and other companies like Tongfu Microelectronics, JCET Group, and Huatian Technology have the potential to produce these chips as well. Tongfu Microelectronics, in particular, is considered a strong player in the industry, although it may still require more time to prepare for mass production.
In conclusion, Chinese tech firms are taking proactive measures to secure a stockpile of HBM chips amid concerns of US restrictions. They are also looking to ramp up domestic production of these chips to reduce dependency on foreign suppliers.