(External Research Brief | SHINDEV Research Team)
In the semiconductor value chain, memory chips are widely regarded as the “memory component” of computing systems—and have long been the largest segment by scale, the most concentrated by market structure, and among the most cyclical across the industry. The SHINDEV Research Team believes that memory, as the largest semiconductor sub-sector, offers substantial market headroom and strategic significance. In 2023, the global memory market reached USD 167.5 billion, while China’s memory market was approximately USD 94.2 billion. Memory products also account for roughly 27% of the overall semiconductor market by segment, underscoring their importance and long-term potential.
Driven by 5G, cloud computing, and AI, structural growth across consumer electronics, servers/data centers, and automotive electronics is accelerating the release of memory demand. Meanwhile, domestic players have made visible progress in catching up on DRAM and NAND technology, while broader ecosystem coordination is improving—collectively speeding up the localization of China’s memory supply chain. In the Xinchuang (information technology application innovation) ecosystem, domestic penetration remains relatively low for foundational components such as memory chips, databases, and GPUs, making substitution more urgent and opening a broader incremental growth runway for the memory industry.
Memory is the largest semiconductor segment: Global memory market reached USD 167.5B in 2023; China stood at ~USD 94.2B; memory represents ~27% of semiconductor segments.
Downstream expansion unlocks demand: AI servers, data centers, automotive intelligence, 5G devices, and smart homes form a strong demand base.
Localization accelerates and a “golden window” may emerge: Domestic companies are progressing rapidly in DRAM and NAND, with potential share gains over time.
Xinchuang brings “high-certainty incremental substitution”: With low domestic penetration in core IT stacks, memory—作为底座—may see faster substitution.
Competitive moats are built on “technology + customers + ecosystem collaboration”: Sustained R&D, customer access, and supply-chain synergy are essential.
By storage medium, modern digital storage includes optical storage, magnetic storage, and semiconductor storage. Among them, semiconductor memory represents the largest market and is widely deployed in smartphones, PCs, servers, automotive electronics, and industrial systems.
By data retention, memory chips can be categorized as:
Volatile memory: represented by DRAM, used for high-speed cache and temporary working data;
Non-volatile memory: represented by NAND Flash and NOR Flash, used for long-term storage of system data and code.
SHINDEV also emphasizes that memory controller chips serve as the critical “control hub” for commercialization and scaling—handling data management, error correction, endurance management, and multi-channel scheduling. As the industry evolves toward higher capacity, higher parallelism, and higher reliability, controller complexity and value-add are expected to rise accordingly.
Compared with general-purpose servers, AI servers require substantially higher bandwidth, capacity, and storage throughput. The expansion of AIGC, model training, and inference deployments is expected to boost demand for DDR5, HBM, and enterprise-grade SSDs, increasing memory content per system. Continued AI investment by hyperscalers and enterprise customers is likely to make AI servers a multi-year demand catalyst.
Smart cockpits, ADAS, and autonomous-driving roadmaps are pushing automotive-grade memory toward higher density, higher bandwidth, and stronger reliability. NAND, DRAM, and high-density NOR are expected to penetrate deeper into in-vehicle computing platforms, data logging, sensor fusion, and cockpit systems—shifting automotive memory from a supporting component to a high-value core module.
Smartphones, PCs, tablets, surveillance, and smart home devices provide stable baseline demand. Meanwhile, cloud expansion and data-center buildouts continue to increase enterprise SSD adoption, potentially lifting memory’s share of server BOM over time. Multi-scenario resonance is expected to support a steady demand release.
China’s memory industry started later and has historically lagged global leaders, especially in high-end DRAM and NAND where concentration remains high and barriers are steep. However, in recent years—supported by policy tailwinds, capital investment, and improved manufacturing execution—domestic players have made tangible progress across process technology, product iterations, and volume delivery. The catch-up pace in DRAM and NAND is accelerating, and domestic market share may improve gradually.
At the same time, China’s ecosystem is transitioning from “single-point breakthroughs” to “system-level collaboration”—with better coordination across wafers, controllers, modules, and system integrators—enhancing supply-chain security and delivery stability.
Xinchuang aims at technological self-reliance and security, expanding from government to key industries such as finance, power, and telecom, and then to broader sectors. Domestic penetration still has room to improve across both hardware and software, particularly in foundational IT infrastructure including memory chips, databases, and GPUs—making substitution increasingly urgent.
The SHINDEV Research Team believes Xinchuang will unlock a more certain and sustainable incremental market for domestic memory. As the ecosystem matures, two directions are emerging:
Scenario enablement: moving from “basic availability” to performance optimization, feature enrichment, and interoperability;
High-end breakthroughs: with process and system advances, domestic storage may increasingly address core workloads such as high-end all-flash systems.
Memory is capital-intensive, highly cyclical, and fast-evolving. SHINDEV believes sustained success requires:
Technology strength: continuous R&D and forward-looking alignment with AI, cloud, and advanced packaging;
Market responsiveness: agile adjustments across product mix and capacity through pricing cycles;
Ecosystem collaboration: synergy across wafers, controllers, modules, and system vendors to strengthen supply chains;
Customer barriers: long qualification cycles and strict reliability requirements create stickiness once mass production adoption is secured.
Memory chips remain foundational across consumer electronics, automotive, cloud computing, AI, 5G, and IoT. With structural demand growth, gradual cycle recovery, and the combined tailwinds of policy support and Xinchuang-driven substitution, China’s memory industry may be entering a new development window. Companies with strong technology execution, deep customer relationships, and ecosystem leverage are likely to capture outsized growth as localization accelerates.
