SINGAPORE/BEIJING, May 15 (Reuters) - Two Chinese

chipmakers are in the early stages of producing high bandwidth

memory (HBM) semiconductors used in artificial intelligence

chipsets, according to sources and documents.

The progress in HBM - even if only in older versions of HBM

- represents a major step forward in China's efforts to reduce

its reliance on foreign suppliers amid tensions with Washington

that have led to restrictions on U.S. exports of advanced

chipsets to Chinese firms.

CXMT, China's top manufacturer of DRAM chips, has developed

sample HBM chips in partnership with chip packaging and testing

company Tongfu Microelectronics, according to three

people briefed on the matter. The chips are being shown to

clients, two of them said.

In another example, Wuhan Xinxin is building a factory that

will be able to produce 3,000 12-inch HBM wafers a month with

construction slated to have begun in February this year,

documents from corporate database Qichacha show.

CXMT and other Chinese chip firms have also been holding

regular meetings with South Korean and Japanese semiconductor

equipment firms to buy tools to develop HBM, said two of the

people.

The sources were not authorised to speak on the matter and

declined to be identified. Hefei-based CXMT or ChangXin Memory

Technologies and Tongfu Microelectronics did not respond to

requests for comment.

Wuhan Xinxin, which has flagged to regulators that it is

interested in going public, and its parent company did not

respond to requests for comment. The parent company is also the

parent of NAND memory specialist YMTC or Yangtze Memory

Technologies. YMTC said it did not have the capability to mass

produce HBM.

Both CXMT and Wuhan Xinxin are private companies which

have received local government funding to advance technologies

as China pours capital into developing its chip sector.

Wuhan's local government also did not respond to requests

for comment.

Separately, Chinese tech behemoth Huawei - which

the U.S. has deemed a national security threat and is subject to

sanctions - is aiming to produce HBM2 chips in partnership with

other domestic companies by 2026, according to one of the

sources and a separate person with knowledge of the matter.

The Information reported in April that a Huawei-led group of

companies aiming to make HBM includes Fujian Jinhua Integrated

Circuit, a memory chip maker also under U.S. sanctions.

Huawei, which has seen demand soar for its Ascend AI chips,

declined to comment. It is not clear where Huawei procures HBM.

Fujian Jinhua did not respond to a request for comment.

LONG JOURNEY AHEAD

HBM - a type of DRAM standard first produced in 2013 in

which chips are vertically stacked to save space and reduce

power consumption - is ideal for processing massive amounts of

data produced by complex AI applications and demand has soared

amid the AI boom.

The market for HBM is dominated by South Korea's SK Hynix

- until recently the sole HBM supplier to AI chip

giant Nvidia ( NVDA ) according to analysts - as well as Samsung

, and to a lesser extent U.S. firm Micron Technology ( MU )

. All three manufacture the latest standard - HBM3 chips -

and are working to bring fifth-generation HBM or HMB3E to

customers this year.

China's efforts are currently focused on HBM2, according to

two of the sources and a separate person with direct knowledge

of the matter.

The U.S. has not put restrictions on exports of HBM chips

per se but HBM3 chips are made using American technology that

many Chinese firms including Huawei are barred from accessing as

part of the curbs.

Nori Chiou, an investment director at White Oak Capital and

a former analyst who looked at the IT sector, estimates that

Chinese chipmakers lag their global rivals by a decade in HBM.

"China faces a considerable journey ahead, as it currently

lacks the competitive edge to rival its Korean counterparts even

in the realm of traditional memory markets," he said.

"Nonetheless, (CXMT's) collaboration with Tongfu represents

a significant opportunity for China to advance its capabilities

in both memory and advanced packaging technologies within the

HBM market."

Patents filed by CXMT, Tongfu and Huawei indicate that plans

to develop HBM domestically date back at least three years when

China's chip industry increasingly became the target of U.S.

export controls.

CXMT has filed almost 130 patents in the United States,

China, and Taiwan for different technical issues related to the

manufacturing and functionalities of HBM chips, according to

Anaqua's AcclaimIP database. Of those, 14 were published in

2022, 46 in 2023, and 69 in 2024.

One Chinese patent, published last month, shows the company

is looking at advanced packaging techniques like hybrid bonding

to create a more powerful HBM product. A separate filing shows

that CXMT is also investing in developing technology needed to

create HBM3.