As a shortage of memory chips drags on amid surging demand for artificial intelligence (AI), global Big Tech companies are turning their attention to Chinese-made semiconductors. After Apple, unable to withstand soaring prices, signaled the possibility of using Chinese memory chips such as those from Yangtze Memory Technologies (YMTC), rumors are now spreading that Google is also reviewing the adoption of DRAM from Changxin Memory Technologies (CXMT) for its next-generation infrastructure.
However, the semiconductor industry analyzes that Big Tech's attempts to adopt Chinese chips face practical constraints that are difficult to resolve before they can lead to actual supply contracts. For Big Tech to ultimately adopt Chinese semiconductors, they must clear three major gates. The problem is that none of them is easy.
① Clearing U.S.-China Government Regulatory Barriers and Securing Approval
The first obstacle they encounter is trade and security regulation from both governments. For Apple to install memory chips such as YMTC's NAND flash in its own products, including iPhones and iPads, it must obtain separate approval from the U.S. government. The prevailing view is that, amid intensifying U.S.-China technology hegemony competition, U.S. regulators are unlikely to easily approve this.
The same goes for Google. There is a legal risk of having to circumvent the U.S. sanctions network on semiconductors against China. On top of this, the Chinese government's own nationalist policy is a variable. Announcing plans to build large-scale domestic AI infrastructure, the Chinese government stated it would raise the share of domestically produced chips to 80%. This is why some point out that, setting aside the regulatory barriers, Chinese companies such as CXMT and YMTC lack the physical capacity to export large volumes to U.S. Big Tech.
② Easing Security Concerns to Be Used in Core Infrastructure and Devices
The potential security concerns posed by Chinese-made semiconductors are an issue directly tied to corporate survival. In Google's case in particular, the area being reviewed for adoption is mentioned as the Tensor Processing Unit (TPU), a next-generation high-performance AI computing chip, rather than consumer devices such as the Pixel phone. This is highly likely to heighten the U.S. government's security concerns. This is because the U.S. government and large corporate clients, who are extremely sensitive to the possibility of national information leaks and hacking, are unlikely to tolerate Chinese-made memory being installed in Google's cloud infrastructure.
"Combining Chinese-made components into one's own core AI computing infrastructure is to invite a security gap that could threaten control over the entire system," an industry official explained. While Apple has the capability to compensate for component specification limits with its unrivaled software optimization technology, the prevailing industry view is that it is difficult to quell hardware-level security risks themselves, such as backdoors.
③ Watching the Big Three Memory Makers, Who Say "How Dare You Leave Us"
A deterioration in relations with the Big Three memory makers — existing core suppliers Samsung Electronics (005930.KS), SK hynix (000660.KS), and Micron — is also a practical limit that Big Tech companies must bear. The global memory market is currently seeing a severe supply shortage stand out due to explosive AI demand.
The supply volume of the three memory makers is said to be meeting only 60 to 70% of market demand. Moreover, the phenomenon of a few players monopolizing the already scarce volume has been growing recently, with some Big Tech companies such as Nvidia entering long-term agreements (LTA). The mismatch between memory demand and supply is expected to gradually ease from around 2028, when the three companies' expanded capacity comes online. Even this is a forecast based on current memory demand, and there are observations that the memory shortage could last longer if AI usage surges further than expected.
If Apple and Google make their strategy of adopting Chinese memory a reality under such circumstances, the three memory makers, who currently hold the key to supply, are also expected to take strategic countermeasures. They could readjust supply priorities for products such as high-bandwidth memory (HBM) and enterprise solid-state drives (eSSD). From the perspective of the three memory makers, there are global clients lined up to replace Google or Apple.
Apple CEO Tim Cook has mentioned the possibility of using YMTC memory, and rumors of Google's cooperation with CXMT emerged over the weekend, but the prevailing industry view, when all of this is taken together, is that the likelihood of it becoming reality is low.
※ 'Gap World' is a column that digs into the gaps in the flood of news during the era of technology hegemony competition through the eyes of reporter Seo Jong-"gap." Find the core and outlook of cutting-edge technology and semiconductor issues in 'Gap World.' Please subscribe to the Gap World column and the reporter's page.
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