The logo of China's top memory chipmaker CXMT can be seen on the facade of company's production facility in Beijing on July 29. | REUTERS

China’s CXMT plans to start production of HBM3E, an advanced type of high-bandwidth memory chip used with AI processors, despite as little as 20% of the chips it makes being usable, two people familiar with the matter said.

The decision highlights China’s intense shortage of the AI memory chips, which are essential to a government-backed push to develop domestic alternatives to Nvidia’s AI processors at scale amid U.S. curbs on access to foreign-made technology.

ChangXin Memory Technologies — China’s largest maker of dynamic random-access memory (DRAM), the conventional memory used in computers and servers — has sent HBM3E samples to several domestic AI chip designers, the people said.…