CXMT is reportedly set to begin HBM3E mass production despite low yields, with some reports citing defect rates of up to 80%.

CXMT, China's largest DRAM maker, will begin mass production of HBM3E, a high-bandwidth memory product designed for AI applications, despite low yields, Reuters reported on October 28 local time.

According to the report, CXMT has sent HBM3E samples to Chinese AI chip design companies and will start small-scale production within two months. Yields are reportedly between 20 and 30 percent, meaning that only that share of produced chips passes quality standards. By comparison, SK Hynix's yield is about 70 percent.

Reuters said CXMT's move shows how severe the AI memory shortage is in China.

Low yields typically mean more chips must be discarded or reworked, which raises production costs. CXMT's HBM3E is expected to cost more than rivals' products. Reuters reported last month that Chinese AI chip companies, including Huawei and Cambricon, had raised their AI chip prices by 20 to 50 percent due to higher memory costs.

Counterpoint Research said SK Hynix held a 50 percent share of global HBM revenue in the second quarter, followed by Samsung Electronics at 33 percent and Micron at 18 percent. CXMT ranked fourth globally with a 10 percent share of DRAM revenue over the same period. Reuters reported that it will not be easy for CXMT to narrow the gap, as U.S. export controls make it difficult for the company to secure advanced semiconductor equipment.