Chinese memory companies aren't slowing down. China's CXMT is reportedly planning on expanding its portfolio into flash memory, which could intensify competition for Micron Technology and SK Hynix.

CXMT-which is a specialist in dynamic random-access memory (DRAM)- intends to establish a NAND flash memory research-and-development production line at a new factory in Beijing, Reuters reported Friday, citing people familiar with the matter. CXMT didn't immediately respond to Barron's request for comment.

DRAM is short-term working memory that computers and AI hardware use to manage active data and running processes. NAND flash memory is used for longer-term storage.

CXMT's move threatens to make the NAND market look pretty crowded. Chinese company Yangtze Memory Technologies, or YMTC, is already making its presence felt in the flash-memory sector, taking 14% of the market in the second quarter of the year, according to Counterpoint Research.

If CXMT makes a serious push into flash memory the NAND market could be further fragmented. Currently the biggest player is South Korea's Samsung Electronics with a 28% share, followed by its domestic peer SK Hynix with a 19% share. Among U.S. companies, Micron had roughly 15% share in the second quarter, while Sandisk had 11%, Counterpoint data showed.

As for what it means for shareholders, both Micron and SK Hynix currently generate about a quarter of their revenue from NAND. However, Micron has less of the market to lose to Chinese companies than its Korean peer.

In the short-term, both Micron and SK Hynix investors can be reassured that the memory-chip market is growing so fast that there is still massive revenue and profit growth to go around. The DRAM market grew 57% in the second quarter from the prior quarter and NAND grew 70%, Counterpoint said.

Additionally, there's no confirmation when or if CXMT intends to move into commercial production of NAND chips. If it does, then it is likely that CXMT would concentrate first on the domestic Chinese market. That could mean it is a bigger threat to its domestic rival YMTC than Micron or SK Hynix.

Micron shares were up 1.1% in premarket trading and American depositary receipts of SK Hynix were rising 1.4%.