[Chip Talk] D-RAM Leading the AI Era... China Eyeing Korea's Technology 5 Years Ahead

Recent Leakage of Semiconductor Technology from China All D-RAM
Samsung Invests 4 Trillion to Develop Process Technology Leakage
Chengdu Gaochen in China Develops 20nm-Based D-RAM
China Recruits 'Senior Talent' to Narrow Gap
High Salaries Offered to Experts with 20-30 Years Experience
China's Leading Semiconductor Company CXMT Rapidly Pursues
Unauthorized Leakage by Former Samsung Electronics Employee in 2016
With Improved Technology, Also Developing HBM
Intense Competition Among Korea-US 'Big 3' in Global Market
Samsung, Hynix, Micron Accelerate Innovation

Our semiconductor companies' 'DRAM' technology has recently become a concentrated 'target' for leakage to China, prompting the industry to call for heightened vigilance.

According to the legal and industry sectors on the 5th, all the semiconductor technologies confirmed to have been leaked to China in recent years were focused on DRAM. On the 27th of last month, the Seoul Central District Prosecutors' Office Information Technology Crime Investigation Division (Chief Prosecutor Andong Geon) indicted and arrested Choi Mo (66), CEO of Chengdu Gaozhen (China), and Oh Mo (60), head of development, on charges of violating the Industrial Technology Protection Act and the Unfair Competition Prevention Act. The technology they transferred to China around September 2020 was DRAM process technology. Samsung Electronics invested 4 trillion won to develop this technology. Based on the leaked technology, Chengdu Gaozhen has been investigated to have produced the second DRAM pilot wafer in China and developed DRAM based on a 20 nm (nanometer, one billionth of a meter) process. Earlier leaks in 2016 and 2018 to China also involved technologies aimed at creating next-generation DRAM and improving performance.

Industry insiders say that our DRAM technology is always at risk of leakage. DRAM, along with NAND flash, is considered one of the two pillars of memory semiconductors. To strengthen the semiconductor industry, improving DRAM technology is an essential task. The importance of DRAM has grown even more with the rise of artificial intelligence (AI). Products derived from DRAM are also rapidly emerging. High Bandwidth Memory (HBM), which stacks DRAM, is a representative example. As China recently tightens efforts to independently develop not only DRAM but also HBM, the defense of our DRAM technology has become even more critical, analysts say.

China Targets Korean Senior Talent

Industry experts estimate that China's DRAM technology lags about five years behind South Korea's. In May 2022, the Korea Eximbank Overseas Economic Research Institute compared the situation where China's DRAM manufacturer 'Changxin Memory Technologies (CXMT)' was attempting to mass-produce 10 nm second-generation DRAM with Samsung Electronics and SK Hynix planning to mass-produce 10 nm fifth-generation DRAM the following year. Considering that the technology gap per generation is usually between two to two and a half years, the technological gap between the two countries was estimated to be over five years. Industry insiders believe that the gap analyzed then has not significantly changed even after two years.

To narrow the gap quickly, China has chosen talent acquisition as its method. As a de facto latecomer in the global semiconductor market, China lacks know-how and infrastructure. Against this backdrop, China has devised a strategy to leverage its financial power to recruit top talent and implant their technology into domestic experts.

Senior talents in their 60s and above, who are losing positions in our companies, are reportedly the targets for recruitment. Most of these individuals are either approaching retirement or working with reduced salaries while waiting for other options, and have been swayed by China's offers. These experts have honed DRAM technology over 20 to 30 years working at our companies. The Choi and Oh mentioned earlier, who were indicted and arrested last month, were in their 60s and 50s when they set foot in China. As a countermeasure, SK Hynix has implemented a 'technical expert' system since 2018 that allows employees to work beyond the age of 60, and Samsung Electronics has operated a 'senior track' without a retirement age for outstanding personnel since 2022. However, it remains practically difficult for senior talents to reject China's lucrative salary offers.

Fierce Pursuit by CXMT

While those who leak technology can be punished, the leaked technology itself cannot be taken back. Our DRAM technologies circulating among Chinese companies have recently become the foundation for China's DRAM growth. In particular, CXMT, which has emerged as a leading Chinese semiconductor company, is pursuing aggressively. This is the company where Kim Mo, a former Samsung Electronics manager, illegally leaked Samsung's 18 nm DRAM semiconductor process information in 2016.

CXMT is reportedly aiming to develop HBM, leveraging its recently improved DRAM technology. According to the Japanese media 'Nikkei Asia,' CXMT is in contact with U.S. and Japanese companies to purchase equipment necessary for HBM production. It is also known to be actively recruiting our semiconductor engineers through both online and offline methods. CXMT is currently evaluated to be capable of an 18.5 nm DRAM process. Although this is significantly behind our companies aiming for 10 nm, it is a remarkable achievement accomplished in just two years, attracting considerable attention. Based on rapidly improved technology, CXMT also developed LPDDR5 (low-power DRAM) last year. However, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) is considering placing CXMT on the so-called 'entity list,' which restricts access to U.S. technology, posing a variable in CXMT's pursuit.

Intensified Competition Among DRAM 'Big 3'

While China is trying to catch up, competition among the world's DRAM 'Big 3' continues. DRAM innovation is rapidly advancing through Samsung Electronics, SK Hynix, and Micron (U.S.), making it still difficult for China to keep pace. In August, SK Hynix announced the world's first development of a 16-gigabit (GB) DDR5 DRAM applying the 10 nm-class sixth-generation 1c process. The generations of 10 nm-class DRAM processes proceed in the order of 1x, 1y, 1z, 1a, 1b, and 1c, with each generation applying finer processes that improve performance and power efficiency. SK Hynix plans to apply the 1c technology to its main DRAM product lines, including next-generation HBM, LPDDR6, and GDDR7 (graphics DRAM). Samsung Electronics also plans to begin mass production of 10 nm-class sixth-generation DRAM within this year. Although there has been no official announcement yet, the industry believes development is in its final stages given the commitment to mass production within the year.