The huge profits of SK Hynix and Samsung are opportunities for Chinese storage companies

# Source: Wall Street Insights

By Zhao Ying

If the supply-demand imbalance in memory chips persists into the first half of 2027, the era of windfall profits for South Korean enterprises may turn into a window of opportunity for Chinese manufacturers to narrow the technological gap. Samsung, SK Hynix and Micron are unable to meet global demand, which provides Chinese memory chipmakers with a market entry opportunity. If South Korean firms fail to convert their windfall profits into technological barriers, Chinese competitors may erode their advantages once the market cools down.

Soaring memory chip prices have brought substantial profits to Samsung Electronics and SK Hynix, yet the ongoing supply shortage is opening a market window for Chinese memory chip manufacturers. Industry experts warn that if the supply-demand imbalance lasts until the first half of 2027 or even longer, the era of windfall profits for South Korean enterprises could instead become a golden opportunity for their Chinese competitors to narrow the technological gap.

According to a Tuesday report by DIGITIMES, at a recent seminar on the trends of next-generation semiconductor technology held in South Korea, Professor Seok-jun Kwon from Sungkyunkwan University pointed out that the memory industry is experiencing a super cycle, with DRAM prices surging by 300-400% in just a few months. However, Samsung, SK Hynix and Micron are unable to satisfy global demand, which creates a market entry opportunity for Chinese memory chip manufacturers.

Kwon emphasized that the expansion potential of Chinese enterprises is not limited to the consumer retail sector, but also extends to the enterprise-level market. Even capturing a 5-10% market share will be sufficient to accumulate momentum for their future growth.

If Chinese enterprises can gain more technical experience during this window period, it will exert a far-reaching impact on the global memory chip landscape.

## Faster-Than-Expected Technological Catch-Up

Chinese memory chip manufacturers are catching up with leading South Korean enterprises at an astonishing pace. In early 2025, when SK Hynix was supplying the third-generation High Bandwidth Memory (HBM3E) chips, ChangXin Memory Technologies (CXMT) was still developing HBM2 technology. Nevertheless, reports in mid-2025 indicated that the company had leapfrogged to the HBM3 development stage.

Kwon noted that CXMT's accelerated progress stems not only from its own capital, but also from investments by local governments and Huawei. New technology tests are conducted not only in CXMT's own factories, but also frequently in Huawei-invested facilities in Guangdong and Shanghai, enabling the company to identify viable solutions before scaling up production internally. This model has allowed CXMT to shorten its R&D cycle and rapidly commercialize technological innovations.

## Strategic Significance of the Market Window Period

For Chinese enterprises, the current market opportunity holds dual value. On the one hand, the tight global supply has reduced customers' sensitivity to technological generation gaps, creating market space for relatively backward products. On the other hand, the sustained high-price environment has provided Chinese enterprises with ample profit margins to support investment in technological R&D.

Kwon warned that if the supply shortage persists until the first half of 2027 or later, it will essentially grant Chinese manufacturers more time to acquire technical expertise. The real risk facing South Korean enterprises is that if they fail to convert their current windfall profits into higher technological barriers, Chinese competitors may erode their dominant position once the market begins to cool down.

## A Technological Watershed in the AI Era

Leading memory chip enterprises must adapt to the AI era to maintain their positions. The performance bottleneck of AI has shifted from core computing power to memory, and power consumption in particular will determine whether memory chip manufacturers can enter the edge AI market. Although HBM remains the dominant technology at present, its structural limitations mean that alternative solutions will inevitably emerge.

According to Kwon, a key trend is the increasing adoption of SRAM: despite its higher cost and larger footprint, its ultra-low latency makes it more attractive than traditional DRAM in certain AI models. Future technological progress will focus on Through-Silicon Via (TSV) density, shortening the distance between memory and cores, and developing new interconnect technologies that go beyond silicon interposers.

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