Which Stocks Will Benefit from the Listing of China's "Samsung and SK Hynix," CXMT? [Weekend Money]

DRAM Supply Shortage and Expanding AI Investment Boost the Semiconductor Value Chain
Mirae Asset: "Chinese Semiconductor ETF Investment Strategy Remains Effective"

Reuters Yonhap News

China has made a decisive move toward achieving self-sufficiency in memory semiconductors. With ChangXin Memory Technologies (CXMT), China's largest DRAM manufacturer, starting its listing process this month, industry analysts expect the Chinese semiconductor sector to enter a new phase of growth centered on capital markets, moving beyond the era of state-led investment. In addition, growing shortages in general-purpose DRAM supply, combined with expanded investment in artificial intelligence (AI) data centers, are attracting heightened interest across the entire Chinese semiconductor value chain.

Kang Minhee, a researcher at Mirae Asset Securities, commented, "The dual listing of CXMT and Yangtze Memory Technologies (YMTC) is not just a corporate event, but marks the first time China's push for semiconductor self-reliance is being tested and validated in the capital market," adding, "This year is the beginning of the fruition of a decade-long national project by Chinese authorities."

According to market experts, the improvement in the memory market environment is a key driver behind the listing. As global memory manufacturers concentrate on producing high-bandwidth memory (HBM), the supply of general-purpose DRAM has declined, while demand in China is rising rapidly with large-scale data center investments planned over the next five years. A recent example of a supplier-driven market is CXMT's long-term supply agreement (LTA) with Tencent, valued at approximately 4.5 trillion won.

Kang forecast, "The supply shortage will result in upward pressure on prices," and predicted, "The average selling price of DRAM at CXMT will also rise sharply." Mirae Asset Securities estimates that CXMT's revenue next year will surge to approximately $47.9 billion, with operating profit reaching around $30.4 billion.

Changes in listing regulations have also been positive. China has streamlined the listing process for advanced technology companies, enabling CXMT to complete its review and approval process in just about five months. Kang noted, "The institutional groundwork was laid before memory companies pursued listings," and analyzed, "YMTC is also likely to proceed with its listing at a similar pace."

The Chinese government's semiconductor investment strategy is also evolving. The National Semiconductor Industry Investment Fund, known as the "Big Fund," is shifting its focus from direct initial investments to investments centered on equipment and materials. Kang explained, "This shift in the Big Fund's investment strategy demonstrates that China's semiconductor industry is moving beyond the state-led phase and transitioning to a stage of self-sustained growth."

The benefits are expected to expand to equipment and materials companies. CXMT plans to allocate most of its IPO funds to facility investments and process advancements. Accordingly, performance improvements are anticipated for Chinese equipment manufacturers such as NAURA, AMEC, and HWATSING, as well as memory value chain companies including Biwin, Longsys, GigaDevice, and Montage.

However, it remains difficult for domestic investors to directly access individual stocks, as most are listed on Chinese exchanges. As an alternative, Mirae Asset Securities has suggested investing in ETFs that cover the entire Chinese semiconductor sector.

Kang advised, "The Chinese semiconductor industry tends to move as a whole in response to policy momentum," and recommended, "It is more effective to approach the market from a value chain perspective encompassing memory, equipment, and fabless companies, rather than focusing on individual firms."

He also cautioned that investors should be wary of short-term overheating. Kang added, "During the SMIC listing in the past, there was a surge of profit-taking after the IPO, so it will be important to evaluate individual stocks carefully following the listings of CXMT and YMTC."

This content was produced with the assistance of AI translation services.