CXMT's Q2 Profit Margin Surpasses Samsung and SK Hynix, but HBM3 Yield at 25% Draws Ridicule from Korean Media

Chinese DRAM giant ChangXin Memory Technologies (CXMT) delivered outstanding financial results in the second quarter of 2024, with its earnings before interest and taxes (EBIT) margin soaring to 82%. This performance surpassed SK Hynix's 76%, Samsung Electronics' semiconductor division at 70%, and other major peers like Micron Technology, making CXMT the world's most profitable memory chipmaker for the quarter.

Moreover, CXMT's Q2 revenue surged approximately 1000% year-on-year, the highest growth rate among the six major memory firms—CXMT, Samsung, SK Hynix, Micron, Kioxia, and SanDisk—according to data from QUICK FactSet and corporate disclosures.

However, despite leading in profitability, CXMT faces significant challenges in advancing its cutting-edge process technology. Reports from Korean media indicate that China's largest DRAM manufacturer has initiated trial production of its fourth-generation High Bandwidth Memory (HBM3), but initial yields remain stubbornly low at around 25%. This means three out of every four chips are defective, far below the semiconductor industry's widely accepted mass production benchmark of 80%.

In contrast, SK Hynix has been mass-producing HBM3 since 2022, with yields now exceeding 90%, revealing a stark technological gap between the two companies.

The root of the problem is attributed to TSV (Through-Silicon Via) technology. While CXMT's G4 process for general DRAM production is reportedly stable, the bottleneck lies in TSV. This technology requires drilling thousands of micron-scale holes through each layer of stacked DRAM chips and filling them with copper to enable vertical electrical connections. Any misalignment or incomplete filling renders the entire chip layer defective.

Industry data shows that CXMT integrates approximately 3,000 TSVs per chip, compared to over 5,000 in Samsung's HBM2 and more than 8,000 in SK Hynix's HBM3. Korean media emphasize this as clear evidence of South Korean leadership in TSV process technology.

Industry insiders note that TSV process expertise cannot be accumulated overnight, with Samsung and SK Hynix holding a 4- to 5-year advantage.

Nevertheless, Korean media acknowledge that CXMT is already supplying small quantities of HBM samples to Chinese firms such as Cambricon, steadily advancing commercialization while continuously improving yield rates.