[Click e-Stock] Why the Pace of CXMT's Capacity Expansion Matters

It has been predicted that the pace of future capacity expansion by China's memory maker Changxin Memory Technologies (CXMT) will become the most important factor to watch in terms of global DRAM prices.

Reuters Yonhap News

According to Hana Securities on September 1, CXMT completed the transition to its fourth-generation B1 process, approximately 16nm class, in the second quarter of this year. The yield is estimated to have surpassed 90%. Its DDR5 products currently support 5600MHz, with plans to expand to 6400MHz in the future. However, due to reliance on multi-patterning, the number of process steps has increased, leaving its bit output per wafer and cost at a disadvantage compared to leading companies. As for high bandwidth memory (HBM), CXMT is targeting mass production of 12-layer HBM3E in 2027. Baek Seung-hye, a research analyst at Hana Securities, remarked, "If CXMT can produce approximately 3 to 4 million HBM3E stacks in 2027, it will be sufficient to ease the core AI GPU bottleneck within China."

In the medium to long term, the speed of CXMT’s production capacity expansion—and the resulting supply surplus and timing of impacts on the price floor—will be more important than its technological level from a global memory industry perspective. Baek Seung-hye stated, "CXMT's production capacity is expected to expand from 500,000 wafers per month in 2028 to 800,000 wafers per month after 2030. Around 2028, when the DRAM supply shortage is expected to ease, should CXMT maintain an aggressive expansion stance even during the price downcycle, it could further increase volatility in general-purpose DRAM prices." She added, "Therefore, moving forward, the speed of CXMT’s capacity expansion will be the most critical factor to watch for global DRAM prices."

In its recent first half earnings report, CXMT announced that its self-developed LPDDR6 product has completed sampling and verification, and is rapidly transitioning to mass production. According to Baek Seung-hye, "CXMT's LPDDR6 product has a maximum transfer rate of 12.8Gbps and a maximum per-chip capacity of 16GB, which is comparable to the maximum speeds (14.4 and 10.7Gbps) and maximum capacities (16GB each) of LPDDR6 products unveiled by Samsung Electronics and SK hynix this year." She explained, "CXMT is expected to secure competitiveness in premium smartphone, server, and smart car markets going forward."

CXMT’s revenue for the first half of the year surged by 873% year-on-year to 150.3 billion yuan, exceeding the upper end of its guidance (110 to 120 billion yuan) by 25%. Net profit attributable to the parent company reached 77.6 billion yuan, surpassing the upper end of its guidance (50 to 57 billion yuan) by 36%, turning around from a net loss of 2.3 billion yuan in the same period of the previous year. Baek Seung-hye commented, "As the global DRAM supply shortage persisted in the first half, the increase in prices and sales volume of DRAM products centered around DDR5 and LPDDR drove performance growth." She added, "The first-half gross profit margin jumped to 84.8%, up 72.1 percentage points from 12.7% a year ago—significantly outperforming the average of the three global memory giants (SK hynix, Samsung, Micron) of 76.1%. The sharp improvement in profitability was the result of a combination of surging DRAM prices, expanded production capacity and improved yield at CXMT, as well as growing demand for localization of memory products within China."

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