According to SemiAnalysis, Chinese AI semiconductor buildout faces an unexpected bottleneck that's more critical than manufacturing constraints: high-bandwidth memory shortages. While domestic foundries like SMIC can produce sufficient AI processors, the lack of HBM supply chains has emerged as the primary limitation throttling China's semiconductor ambitions. Huawei's Ascend 910C illustrates this mismatch. The company has foundry capacity to manufacture 805,000 units annually through TSMC, which is a result of stockpiling before the cutoff, as well as SMIC. However, HBM shortages prevent realizing this production potential. Chinese firms accumulated roughly 11.4 million HBM stacks from Samsung before export controls tightened, but these stockpiles won't sustain long-term AI scaling. The memory crunch effectively neutralizes Chinese manufacturing capabilities, giving Western competitors like NVIDIA and AMD a sustained advantage despite Beijing's substantial semiconductor investments.
www.techpowerup.com, Sept. 08, 2025 –
The path toward HBM independence runs through domestic memory manufacturers like CXMT and the recent collaboration with YMTC. Converting standard DRAM production to HBM manufacturing requires specialized equipment, which is predominantly supplied by Western suppliers, creating another dependency layer. China could achieve competitive HBM3E production by 2026 if current investment trajectories continue and equipment restrictions remain stable. However, this timeline assumes successful technology transfer and uninterrupted access to critical manufacturing tools. If export controls expand to encompass additional HBM-related equipment, the development window could become considerably longer. YMTC is reportedly ready to enter DRAM production and could begin purchasing equipment by late 2025, utilizing its secret weapon, Xtacking technology, one of the most advanced hybrid bonding techniques available. This matters because HBM requires stacking at least 16 memory chips with incredible precision, something YMTC has been doing for years with their NAND products.