China Is Coming For Micron’s Thick Margins - Trefis

The semiconductor memory industry is experiencing an unprecedented boom driven by AI server demand for high-bandwidth memory. While this has led to strong profitability for companies like Micron (MU),... Read original →

CXMT’s ascent doesn’t mirror China’s playbook in solar or EVs. DRAM fabrication hinges on EUV tools, which U.S.-led export controls effectively deny, locking CXMT out of high-margin HBM for AI accelerators. Yet in commodity DRAM, its aggressive capacity build-out and cost structure are eroding Micron’s and Samsung’s low-end share. This pressures incumbents to accelerate migration to HBM3E/HBM4 to sustain >80% gross margins. However, the real vulnerability lies in geopolitics: further U.S. restrictions on DUV exports could catalyze China’s push for domestic lithography solutions at mature nodes (≥28nm), distorting global DRAM pricing cycles. Over the next 18 months, Micron will likely lock in long-term AI server contracts in North America, while Samsung and SK Hynix may leverage China-based JVs to hedge regulatory risk. The decisive battleground isn’t fab capacity—it’s the policy corridor between Washington and Beijing.