CXMT
ChangXin Memory Technologies (CXMT), China’s leading memory chipmaker, saw its first-quarter revenue surge more than eightfold from a year earlier, raising concerns that Beijing’s state-driven semiconductor self-reliance strategy is yielding substantial results despite U.S. restrictions.
Analysts say CXMT, armed with aggressive capacity expansion and price competitiveness, is rapidly catching up with the three major memory makers — Samsung Electronics (005930.KS), SK hynix (000660.KS), and Micron Technology.
According to Bloomberg and other media reports on Tuesday (local time), CXMT’s first-quarter revenue reached 50.8 billion yuan (about 11.1 trillion won), up 719.13% year-on-year. Net profit during the same period jumped 1,268.45% to 33.012 billion yuan (about 7.2 trillion won), while net profit attributable to the parent company surged 1,688.3% to 24.762 billion yuan (about 5.4 trillion won). Having posted its first annual profit only last year, CXMT earned 13 times its full-year 2024 profit in just the first quarter of this year.
CXMT signaled that this growth momentum will continue. The company projected first-half revenue of 110 billion to 120 billion yuan, a 612.53% to 677.31% increase from a year earlier. Net profit guidance was set at 50 billion to 57 billion yuan, implying a growth rate of 2,244% to 2,544%.
Founded in 2016 with backing from the Chinese government, CXMT is regarded as a key player driving China’s self-reliance strategy in the global DRAM market, which has been dominated by Samsung Electronics and SK hynix. While Samsung Electronics and SK hynix lead the market with sixth-generation high-bandwidth memory (HBM4), CXMT has set a target of mass-producing the older HBM3 this year, leaving a clear technology gap. However, the company has recently begun shipping DDR5 products, expanding its footprint in the commodity DRAM market that top global players have paid less attention to. Its competitive edge comes from prices 15-20% lower than Korean products and a domestic supply chain.
Demand for high-performance memory has surged amid expanded AI investment by global tech firms, and commodity DRAM prices have risen in tandem, benefiting CXMT. According to market research firm TrendForce, commodity DRAM prices roughly doubled in the first quarter of this year, with another increase of up to 60% possible in the second quarter. Bloomberg explained that “as AI data centers require massive amounts of advanced memory, the ripple effect is spreading throughout the memory market, with commodity DRAM prices continuing to surge.”
CXMT’s inventory strategy has also drawn renewed attention following these earnings. According to Taiwanese media outlet DigiTimes, CXMT had held about 28 billion yuan worth of DRAM inventory produced during the price downturn before the market entered an upward cycle. As memory prices subsequently surged, the company sold this inventory at high prices, simultaneously improving profitability and cash flow. Combined with expanded shipments of high-value-added products such as DDR5, the pace of earnings improvement has accelerated.
Korea’s semiconductor industry is closely monitoring CXMT’s developments. While CXMT’s presence in cutting-edge markets such as HBM remains limited, it is rapidly encroaching on the commodity DRAM market — a core cash cow for Samsung Electronics and SK hynix. According to Omdia data, CXMT’s market share by DRAM sales rose to 7.67% in the fourth quarter of last year, ranking fourth in the world. This is up from around 5% previously.
Global firms taking notice of cheaper Chinese chips also pose a threat. Hewlett-Packard (HP) and Dell are reportedly conducting quality tests on CXMT’s DRAM. Concerns are emerging that if Chinese firms launch a full-fledged low-price offensive going forward, Korean companies could face price competition pressure and deteriorating profitability.
There are also variables. Nvidia CEO Jensen Huang said in an interview with Bloomberg TV the same day, regarding the H200 AI chip, that “the Chinese government has to decide to what extent they want to protect their market,” adding, “My judgment is that, over time, the market will open up.” His remarks reflect an optimistic outlook that the situation may improve, even as Chinese firms currently face difficulties purchasing H200 chips due to Beijing’s own regulations.