Fivefold increase for Chinese chip maker CXMT in Shanghai debut

By Jules Rimmer

China's leading DRAM manufacturer is the world's fourth-largest

CXMT, formerly ChangXin Memory Technologies Corporation, rose by 465% on its debut in Shanghai, becoming the largest stock in mainland China.

Shares in China's CXMT surged more than five times from its IPO price in Shanghai on Monday, as investors scrambled for exposure to the memory chip sector.

Originally priced at RMB 8.66, the stock closed at RMB 49.01, up 465%, with almost 3 billion shares worth about $2.2 billion changing hands during an explosive debut.

Headquartered in Hefei, China, CXMT (CN:688825) is the world's fourth largest memory chip maker behind SK Hynix (KR:000660), Samsung Electronics (KR:005930) and Micron (MU).

The successful flotation raised about $8.5 billion for the 7% of shares that were offered although the over-allotment of shares, allows underwriters to increase that to around $10 billion.

The proceeds from the float will finance a major expansion in production for CXMT, which hopes to increase its wafer capacity from around 350,000 per month at the end of this year to 500,000 by December 2028. This compares to the 550,000 figure of SK Hynix, the 650,000-700,000 achieved by Samsung Electronics and Micron's 385,000.

In the first quarter of 2026 CXMT ranked fourth by revenue, globally, with 7% market share

The DRAM - or dynamic random access memory- chips manufactured by CXMT tend to be used for short-term memory in cheaper electronic goods but the company is also trying to develop its production of more advanced, high-bandwidth chips.

In the superpower battle for AI supremacy with the U.S., the Chinese government wants to establish its own self-reliant AI chain from chips to frontier models.

Until now, however, CXMT's development of the high-bandwidth chips has been held back as the U.S. government has restricted access to ASML's (NL:ASML) state-of-the-art manufacturing tools.

CXMT has also been a bone of contention between Apple and the U.S. government as chief executive Tim Cook has been lobbying the President and the Commerce Department to be allowed to use cheaper CXMT chips that would enable the smartphone manufacturer to lower costs.

In terms of market capitalization, CXMT is now the largest in mainland China at $485 billion, although Hong Kong-listed Tencent is fractionally bigger at $497 billion. However, in a global context it is still dwarfed by its DRAM competitors like Samsung ($1 trillion), SK Hynix ($840 billion), Micron ($1 trillion).

That may change, however, if Nomura's forecasts are proven accurate. Its CXMT analyst, Donni Teng, published a report Monday with a price target of RMB 116, showing an upside of 1239% from its listing price. Teng cited the global supply-demand imbalance, capacity expansion and average selling price hikes as reasons for his optimism.

Teng argued CXMT warranted a price-earnings multiple of 20 times, a considerable premium to those of the Korean chip makers (around 5 times, according to FactSet) and Micron's 12 times.

The success of CXMT serves to underline the semiconductor focus of global equity markets at present, as the 'picks n shovels' trade of the AI boom.

Earlier this month, SK Hynix listed American depositary receipts on Nasdaq in the second-largest share offering ever (SKHY) . While the Philadelphia Semiconductor Index SOX has corrected of late, its year-to-date rally of 66% emphasizes how on trend the sector has been as demand is forecast to far exceed demand through 2027.

-Jules Rimmer

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