CXMTs blockbuster debut in Shanghai sets stage for next test against global memory giants

CXMT‘s blockbuster Shanghai debut has put it in the spotlight, but analysts say closing the technology gap in advanced memory chips, not investor enthusiasm, will determine whether it can challenge the global market leaders.

The Chinese memory maker’s nearly 466% surge in its Monday market debut has fueled optimism that Beijing’s years-long push to build a self-sufficient semiconductor industry is beginning to pay off.

The bigger question now is whether CXMT can narrow its technology gap with Samsung Electronics, SK Hynix and Micron, particularly in high-bandwidth memory, or HBM, a key technology powering the AI boom, where the three companies have established a significant lead. 

“Listing doesn’t change the outlook for the big three or the industry as demand continues to exceed supply for everyone,” said David Gibson, senior analyst at MST Financial.

While domestic demand should continue to support CXMT’s memory chips, Gibson said the company faces a challenge as it does not have access to the latest extreme ultraviolet, or EUV, lithography machines, which are essential for manufacturing advanced chips and are effectively off limits to China under U.S. led export restrictions. 

Without them, CXMT requires about 30% more wafers — a thin slice of semiconductor material used to manufacture chips — than its competitors to produce the same amount of memory, a situation that is hard to overcome. 

“CXMT is targeting to produce HBM from the end of 2026. The new Shanghai fab is geared to produce AI chips, including HBM,” said MS Hwang, research director at Counterpoint Research.

He added that the company’s initial products are likely to be HBM3E or HBM3, depending on the performance it can achieve, leaving it one to two generations behind competitors already moving toward HBM4 and HBM4E.

Samsung Electronics, the dominant player in the global DRAM market, said during its second-quarter earnings call Thursday that it had scaled up HBM4 sales and shipped the industry’s first HBM4E samples to major customers.

“Yes CXMT will make HBM given it is stacked DRAM but yields will be low and hence volumes low,” Gibson said, pointing out that the company remains behind competitors who want high capacity and high speed. 

Yield is a semiconductor industry term that broadly means the number of usable chips that are produced during the manufacturing process. Chipmakers aim for maximum yield.

Gibson also said the CXMT is likely to continue gaining global DRAM market share, with most of the growth expected to come from Chinese customers, including Tencent, ByteDance, Alibaba and domestic phone makers.

Samsung Electronics maintains its lead in the global DRAM market with a 38% market share, followed by SK Hynix at 29% and Micron at 22%, according to Counterpoint Research, while CXMT share stood at 8%.

CXMT currently supplies memory chips to many Chinese smartphone brands and is gradually expanding its presence in China’s PC and server markets, said Ellie Wang, analyst at TrendForce. However, its product portfolio remains focused on mainstream and mid-range segments, with relatively limited capabilities in high-capacity server products and advanced memory for AI servers.

Going forward, the company’s future holds both bull and bear cases, said Hwang. “The bull case is catching up on technology. The bear case is failing to overcome equipment regulations and technological barriers like HBM.” 

“Based on its current development and production progress, it will remain challenging for CXMT to substantially narrow the gap before AI-driven memory demand begins to normalize,” said Wang, adding that the company continues to develop new process technologies and products in an effort to close the gap.

Shares of CXMT were up over 5% in Friday trading.