CXMT has multiplied its profits by 18

A few days ago we witnessed how ChangXin Memory Technologies (CXMT) had just presented figures that seemed unthinkable just a year ago. The Chinese company specialized in DRAM memories has skyrocketed its net profit by more than 1,688% in the first quarter, causing its income to multiply by eight compared to the same period of the previous year. The culprit, as is usual in these cases, is global memory shortagewith long supply chains that are focusing almost exclusively on one thing: AI.

Why is it important. CXMT has gone from being an almost anecdotal actor to become a key piece of the global semiconductor board in a matter of months. The company was born in 2016 to reduce China’s dependence on large DRAM manufacturers, a market historically controlled by Samsung Electronics, SK Hynix and Micron. A decade later, that bet is beginning to bear fruit at the worst possible time for its rivals and at the best possible time for Beijing.

In detail. According to inform Nikkei Asia, CXMT posted a net profit of 24.7 billion yuan (about $3.6 billion) in the first quarter, with revenue of 50.8 billion yuan. The company itself attributes this jump to the sharp global rise in DRAM prices. To get an idea of ​​the change in scenario, a year ago, in the same quarter, the company was still recording losses of 1.6 billion yuan, according to data collected by Reuters.

For the first semester as a whole, CXMT foresees revenues of between 110,000 and 120,000 million yuan and a net profit that could reach 57,000 million. That is to say, CXMT is going through a very sweet moment.

Memory for AI. As we have mentioned, and you can surely imagine, the takeoff of CXMT is due to the great memory crisis that we are witnessing at all levels. Large manufacturers have shifted much of their production lines toward high-bandwidth memory (HBM) to power AI data centers, leading to unprecedented shortages in conventional DRAM.

According to data According to TrendForce, standard DRAM prices have nearly doubled in the first quarter and could rise another 60% in the second. And CXMT has slipped into this gap, which currently has a global share of 7.67% according to Omdiamaking it the fourth largest manufacturer in the world and the first in China.

The customer factor. There are large companies that are already looking at CXMT with some interest. Bloomberg appointment Among its clients are Alibaba, Tencent and ByteDance, the big names in the Chinese digital ecosystem. But the circle is widening, and Nikkei Asia says that PC manufacturers of the caliber of HP, Dell, ASUS or Acer are open to homologating their chips given the difficulties in obtaining sufficient memory on the market.

Geopolitics. The issue, however, is complicated in terms of regulation. And in the United States they already work in the proposal known as the MATCH Actwhich seeks to tighten restrictions on the export of chip manufacturing equipment to China and include more companies on commercial blacklists, including CXMT itself and Hua Hong Semiconductor, as detailed by Nikkei Asia.

The IPO prospectus was also presented just after the summit between Donald Trump and Xi Jinping in Beijing, at a time when the technological front continues to be one of the hottest points between both powers.

The IPO. CXMT intends raise 29.5 billion yuan in Shanghai’s STAR Market. It would be one of the largest IPOs of the year in the country. According to the company, the money will be used to update production lines, improve DRAM technology and fund research into the next generation of memories. The company operates three 12-inch wafer fabs spread between Hefei and Beijing, and acknowledges that its current capacity remains insufficient for domestic demand.

And now what. The strategic move that should be followed is to enter HBM. CXMT has started large-scale production of HBM3 memoriesthe critical component for AI servers, thus breaking the control exercised by the three large historical manufacturers. For now, this production remains in China, but its mere existence already helps relieve tension on the global chain.

Cover image | CXMT and Jakub Pabis

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