Bank of Korea: South Korea's monthly memory chip output is set to grow by ~600K wafers by 2028, widening its lead over China's CXMT, set to grow by ~300K wafers
Context & Ripple Effects
South Korea’s memory sector had already moved from the 2022 inventory overhang to a sharp production rebound: February 2024 output was lifted by AI-related memory demand in the 2024 output surge tied to AI memory. Earlier projections for a 41.5% rise in South Korean advanced chipmaking-equipment spending supplied the investment backdrop for additional capacity.
The Bank of Korea’s 2028 outlook frames that buildout as a widening capacity gap rather than a static lead: South Korea is projected to add about twice CXMT’s monthly wafer-output increase. CXMT is nevertheless expanding its customer footprint, with confirmed LPDDR6 supply for Xiaomi’s Xiaomi 18 Fold.
First-order effects
- South Korea’s projected 600,000-wafer monthly expansion gives its memory industry a larger planned capacity increase than CXMT’s projected 300,000-wafer addition by 2028.
- CXMT remains a growing supplier, but the forecast indicates its own new capacity will not close the projected output gap with South Korea over that period.
Second-order effects
- CXMT’s handset customers, including Xiaomi, gain an expanding domestic supply option, while South Korean suppliers retain the larger projected production base for competing memory demand.
- The divergence reinforces the importance of South Korean equipment investment: new fab capacity depends on bringing the advanced manufacturing buildout reflected in the earlier spending forecast into production.
Third-order effects
- If the projections hold, memory manufacturing scale becomes more geographically concentrated in South Korea even as China develops an additional domestic source through CXMT.
- The contrast also underscores that memory capacity is cyclical: South Korea’s 2022 stockpile jump showed that added supply does not by itself guarantee balanced demand.
The trend: AI-related memory demand is driving a new capacity buildout, with South Korea projected to extend its manufacturing-scale advantage over China’s CXMT.