China’s memory-chip champ is lining up a $4 billion share sale, and it is already making the industry twitchy.
ChangXin Memory Technologies, better known as CXMT, has notched technical advances that are trampling on a market long dominated by South Korean firms and US players.
On paper, a monster offering from a memory maker should delight anyone watching the AI boom hoover up supply. AI data centres have been grabbing capacity that would otherwise go to PCs, games consoles and smartphones, nudging prices up for American buyers.
CXMT says it wants to crank up production and chase more international business, but geopolitics is doing its usual brick-wall impression. Successive US administrations have tightened the screws on Chinese chipmakers, making any global expansion feel like a contact sport.
South Korea’s prosecutors are also piling in, alleging CXMT’s rise leans on stolen trade secrets lifted from former Samsung employees. That is awkward when Samsung Electronics and SK Hynix can afford to be vindictive.
Memory chips are the fuel lines of modern computing, and the AI craze has turned the tap wide open. As AI engines from Nvidia and others get beefier, they guzzle more memory, including high-bandwidth memory alongside the old workhorse DRAM.
One AI server chews through more dynamic random-access memory than whole fleets of laptops. Research firm TrendForce reckons conventional DRAM prices are set to surge more than 50 per cent this quarter compared with the previous one.
Until recently, three outfits ran the global DRAM market: Samsung, SK Hynix and US-based Micron Technology. Those firms have pivoted towards higher-margin AI memory, while Micron is stepping back from chunks of the consumer market.
That gap is where CXMT fancies its chances. The company was founded about a decade ago after a state-backed Chinese attempt to buy Micron fell apart, prompting Hefei’s local government to bankroll its own DRAM maker instead.
CXMT is led by US-trained chip engineer Zhu Yiming and has drawn backing from a national tech fund. It has also attracted a who ‘s-who of Chinese tech money, including Alibaba and Xiaomi.
In late December, CXMT said it had filed to list on Shanghai’s Nasdaq-like tech board, targeting the equivalent of $4 billion in fresh cash. Analysts said recent injections value the firm at more than $20 billion.
Beijing is treating CXMT as one of the poster children for semiconductor self-sufficiency in its trade war with the US. Alongside manufacturing specialist SMIC and equipment maker AMEC, the state wants local substitutes for anything the US and its allies can supply.
CXMT’s prospectus paints a picture of a company sprinting from prototypes to mass production in just a few years. Revenue almost tripled in two years to more than $3 billion in 2024, while analysts say its process tech is now within a generation or two of the leaders.
That momentum has come despite US curbs on China’s access to advanced chipmaking kit. DGA-Albright Stonebridge Group, technology policy lead Paul Triolo told the Wall Street Journal: “The progress CXMT has made in the face of U.S. end-use controls on memory has surprised the industry.”
Triolo said Washington would get even more jumpy if CXMT could supply high-bandwidth memory to Huawei. Huawei’s AI processors are pitched as China’s closest domestic alternative to Nvidia’s AI accelerators, which is exactly the sort of thing US officials love to choke off.
Taiwan-backed think tank DSET claims CXMT built its base by scooping up patents from bankrupt German chipmaker Qimonda and raiding Taiwan’s talent pool. In December, Korean prosecutors said they had indicted 10 people, including a former Samsung executive, for allegedly transferring secrets to CXMT, which helped it mass-produce advanced DRAM.
Prosecutors said the suspects took a systematic approach to avoiding detection, using shell companies, office moves and travel routes that masked trips to China. They even swapped a coded warning of four heart emojis to flag danger if South Korea tried to stop them travelling or slap on arrests.
The prosecutors said the alleged leak caused billions of dollars in losses to Samsung and South Korea’s semiconductor-heavy economy. Samsung and CXMT did not respond to requests for comment, and prosecutors did not name the defendants.
US rules do not currently ban American companies from doing business with CXMT, but lawmakers have been making the right sort of angry noises. In 2022, the Fruity Cargo Cult Apple ditched plans to use NAND flash from China’s Yangtze Memory Technologies after congressional pushback, and a year later, members of Congress urged the Commerce Department to consider adding CXMT to its export-control blacklist, citing IP theft concerns and its role in China’s industrial strategy.
