Big profits attract big competition. Micron Technology is reaping the rewards of the memory-chip boom but Chinese companies are eager to get in on the action, meaning the pressure is on for Micron to get moving on the next generation of its hardware.

Fellow memory-chip company, China's Yangtze Memory Technologies, or YMTC, has just filed for an initial public offering in Shanghai to raise $4.9 billion. It's not exactly a surprise after the blockbuster IPO success of its Chinese peer CXMT but it still means more funds flowing into competing products for Micron.

Micron shares were down 3.2% in premarket trading Monday, in line with a wider slump in the technology sector.

YMTC is less of a worry for Micron than CXMT because of the small overlap in their products. YMTC specializes in NAND flash memory, which only makes up about a quarter of Micron's revenue-the rest coming from dynamic random-access memory, or DRAM.

Micron shareholders might also be reassured by the two companies' relative size. YMTC disclosed that its first-quarter revenue was about $7 billion. Micron's latest quarterly revenue was $41.5 billion.

Still, there's potential for that gap to close. YMTC increased its NAND market share to 13% in the first quarter of this year, from 8% a year ago, according to Counterpoint Research. That put it close to equal with Micron. And with YMTC planning to use the proceeds of its listing to upgrade production lines, there's no letup on the horizon.

Micron is partially shielded from Chinese competition by restrictions on Western companies buying China-made hardware. But that's always subject to political change. That means Micron's best defense is to keep innovating, especially in the field of high-bandwidth memory (HBM)-the specialized form of DRAM hardware which is necessary for artificial-intelligence servers.

Micron gave some signals of where it is heading in a talk on Sunday at the Hot Chips conference at Stanford, California. The presentation focused on HBM, with the major obstacles to higher memory bandwidth being sufficient cooling and advanced packaging of memory alongside AI chips. And because HBM is resource-intensive-each unit needs roughly three times the semiconductor wafer capacity of standard memory-expanding supply reduces production of other memory types and drives prices higher across the sector.

If Micron can keep up with South Korean rivals Samsung Electronics and SK Hynix in the race for the next generation of high-bandwidth memory then Chinese competition fears should just be background noise.