High-bandwidth memory — the specialized chips powering Nvidia's latest AI accelerators — appears set to remain dominated by established leaders such as Micron Technology Inc. (MU), SK Hynix Inc. (SKHY), and Samsung Electronics Co. Ltd. (SSNLF) for years.

China, however, is making rapid progress in commodity DRAM and NAND.

That's according to Counterpoint Research analyst MS Hwang, who told MarketDash in an interview that "Chinese vendors are catching up quickly in commodity DRAM and NAND. Yet, the HBM is difficult to catch up."

He added: "I think China vendors can manufacture HBM3 in 1H 2027."

HBM3 in early 2027 is not the current generation. By then Micron, SK Hynix and Samsung Electronics expect to be shipping into HBM4 demand, with the roadmap already pointing past it.

The moat is exactly one generation deep.

Where Competition Could Actually Land

Commodity memory is a different story.

Unlike HBM leaders, traditional NAND suppliers such as SanDisk Corp. (SNDK) and Western Digital Corp. (WDC) appear more vulnerable to rising competition from Chinese manufacturers.

The product here is more standardized; the customer switches on price and the barrier is capital rather than know-how—precisely the barrier a state-backed entrant is built to clear.

That is the surface Chinese supply is aimed at — and the one carrying the most extreme pricing in the market right now.

China's memory ambitions took a major step forward today as ChangXin Memory Technologies (CXMT), the country's largest DRAM manufacturer, completed an $8.6 billion IPO in Shanghai. A 466% first-day rally signaled strong investor confidence in Beijing's effort to build a globally competitive memory champion.

China Wants A Piece Of The 4x Memory Boom

Hwang said memory pricing has risen almost four times over the past year, with most of that move concentrated in the last six months.

He also placed the squeeze away from the data center.

"The key bottleneck is on consumer segments such as smartphones, PC, games, and household goods," he said.

"It is similar in both DRAM and NAND, while DRAM seems to be more tight in supply condition," he added.

So the segment absorbing the sharpest price increases is the same segment where Chinese capacity is arriving. A market priced at four times last year's level is a wide target.

Why Investors Still Value Memory Like A Commodity

Despite record profitability, most memory companies continue trading at forward earnings multiples below 10.

According to Hwang, investors remain skeptical because the industry's economics have not fundamentally changed.

"It is the nature of commodity products with huge capital deployment in a competitive way," he said.

As long as manufacturers continue competing primarily on production scale and pricing, rather than structural changes in industry discipline, investors are unlikely to assign software-like valuation multiples.

That may explain why AI has created two distinct investment stories inside memory.

Companies with exposure to HBM continue to benefit from technological barriers that Chinese rivals cannot easily overcome.

Meanwhile, businesses more dependent on commodity DRAM and NAND could face increasing competitive pressure as Chinese manufacturers expand capacity.

For investors, the next question may no longer be whether memory remains attractive, but which kind of memory business they actually own.