China is capturing a larger slice of the global memory chip market. The latest data from Counterpoint Research shows that Chinese firm CXMT now holds 10% of the DRAM market in Q2 2026, up from just 4% in the same quarter a year earlier.

The growth is accelerating. CXMT held 8% in Q1 2026, meaning the jump to 10% came within a single quarter. Fellow Chinese chipmaker YMTC also holds 14% of the NAND flash market, up from 9% a year ago. Their rise comes amid years of US export restrictions aimed at limiting China's access to advanced chipmaking tools, which pushed Chinese firms to invest heavily in domestic capacity for mainstream memory products.

Micron Holds Its Ground

Micron has not been displaced. The U.S. company grew its DRAM market share to 24% in Q2, up from 22% in Q1, while its NAND share rose from 13% to 15%. Samsung, the long-standing DRAM leader, continues to compete in the same segment, making share shifts quarter to quarter a normal feature of a three-way market alongside SK Hynix.

Micron Technology, Inc. (MU)

More significantly, Micron's high-bandwidth memory (HBM) capacity is fully committed. Every unit is sold under binding, take-or-pay contracts through the end of 2026, meaning Chinese competition in lower-end chips does not directly threaten Micron's revenue. HBM, the stacked memory used alongside AI accelerators from major GPU makers, has become the most contested segment of the memory industry as data center buildouts continue.

Micron's trailing 12-month net margin sits around 55%. Its forward price-to-earnings ratio is roughly 13, which analysts say looks compressed given the company's revenue visibility.

SK Hynix and Sandisk Feel the Pressure

Not every player is keeping pace. South Korea's SK Hynix saw its DRAM share fall from 29% to 25% in a single quarter, and Sandisk's NAND share dropped from 13% to 11%.

SK Hynix has been shifting resources toward high-bandwidth memory for AI hardware, where it has been a leading supplier to makers of AI accelerators. That move may weigh on near-term market share numbers but positions the company in a higher-value segment.

The overall DRAM market grew 57% quarter over quarter, and NAND grew 70%. Even companies losing share are operating in a rapidly expanding market.

Western Digital has restructured its business heavily toward enterprise and cloud storage, a segment that now accounts for about 89% of total revenue. Its HDD capacity is largely allocated through 2028. The company recently posted trailing net margins near 73%. Shares have fallen more than 10% recently, but long-term contracts with major cloud customers provide a stable revenue base.

China's Next Steps and Industry Constraints

CXMT has also begun small-batch production of high-bandwidth memory and plans to mass-produce LPDDR6 chips later this year. That marks a step forward, but global AI-driven demand still far outpaces what any single region can supply. How quickly CXMT can move from small-batch HBM output to volume shipments that meet AI accelerator makers' qualification requirements is a key question for the coming quarters.

Building advanced AI hardware requires roughly three times more wafer capacity per chip than standard DRAM, and clean room space and extreme ultraviolet lithography machines remain hard bottlenecks. Export controls further restrict Chinese producers' access to the most advanced equipment, which shapes how quickly domestic capacity can scale.

The memory market has shifted away from its historical boom-and-bust cycle. Demand from AI data centers is creating what analysts describe as a multi-year supply squeeze.

Micron trades at around 13 times forward earnings, while Western Digital sits at around 23 times. Both companies are generating strong profits while investing heavily in next-generation capacity.

The overall picture is clear: Chinese chipmakers are gaining ground in the broader memory market, but the AI-driven demand surge is large enough that established players like Micron and Western Digital remain well-positioned for now.