In 2016, two DRAM companies were established in China: Fujian Jinhua, founded in Fujian province facing Taiwan, and CXMT (Changxin Memory Technologies), established in Hefei province, which was heavily investing in the semiconductor and LCD industries. Although both companies were founded in the same year, their fates diverged significantly.
Recently, CXMT went public and has grown into a global competitor, challenging Samsung Electronics and SK Hynix. In contrast, Fujian Jinhua has faced prolonged operational halts and has yet to achieve notable success.
Both companies aimed to establish 12-inch wafer fabs and attracted investments worth hundreds of billions of yuan under similar conditions. In terms of construction speed, Fujian Jinhua initially appeared to be ahead. It partnered with Taiwan's UMC to acquire 32-nanometer DRAM technology. However, some personnel from UMC had previously worked at Micron, which led to a lawsuit from Micron in 2017 over allegations of trade secret theft. In October 2018, the U.S. Department of Commerce added Fujian Jinhua to its Entity List, citing that the company posed a threat to the economic survival of U.S. firms due to suspected theft of American technology.
As a result, Fujian Jinhua's suppliers, including U.S. semiconductor equipment and software companies, severed ties, forcing semiconductor equipment scheduled for shipment to return to warehouses. UMC also announced the suspension of its collaboration with Fujian Jinhua, halting the construction of a nearly completed factory. The lawsuit continued for nearly six years, and in 2024, a U.S. court found Fujian Jinhua not guilty of trade secret theft. However, the company had already suffered irreparable damage. Currently, Fujian Jinhua has restarted its factory using domestic equipment, but it still faces a significant technological gap with global competitors.
In contrast, CXMT took a different approach. CEO Zhu Yiming acquired the patent portfolio of the bankrupt German company Qimonda and secured licensing agreements with U.S. firm Rambus, legally obtaining intellectual property rights. This strategy avoided any controversies related to the hiring of competitors' personnel or trade secrets. CXMT began mass production of 8Gb DDR4 chips at its Hefei Plant 1 in September 2019. Like many Chinese semiconductor firms, CXMT likely had a significant reliance on foreign equipment. Had the U.S. placed CXMT on the Entity List at that time, it might have faced a fate similar to Fujian Jinhua. However, CXMT had no allegations of technology theft or criminal cases against it, leaving the U.S. without justification to add it to the list.
Subsequently, while the U.S. Department of Defense imposed sanctions by listing CXMT as a company linked to the Chinese military, the full ban on equipment and technology supply has been postponed. In the meantime, CXMT has completed its Hefei Plant 2 and Beijing Plant 1, which utilize a significant amount of domestic semiconductor equipment. Riding the wave of an AI-driven memory supercycle, CXMT recorded its first profit since its establishment in 2025. The company is currently negotiating product supply agreements with Apple, HP, and others, and is also pursuing the construction of a Beijing Plant 2, showcasing rapid growth.
The divergent paths of these two companies ultimately boil down to one question: how they secured their technology. The personnel transfer through UMC left a basis for allegations of theft, while CXMT's acquisition of patents eliminated any such grounds. This 'first step' has completely separated the trajectories of the two companies.
* This article has been translated by AI.
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