What CXMT's blockbuster debut means for Korea's memory titans

[NEWS ANALYSIS]

Shares of Chinese memory maker CXMT surged 465.8 percent above their offering price on its Shanghai debut, making it China’s most valuable company on day one of its trading and putting Korean chipmakers Samsung Electronics and SK hynix on edge over whether it signals an industry peak or the start of a Chinese supply glut that could hurt Korea’s chip business.

CXMT closed at 49 yuan ($7.24) on Monday. The Chinese company issued 6.688 billion new shares at 8.66 yuan apiece in its initial public offering (IPO), raising 57.92 billion yuan. The IPO is the largest in Asian equity markets this year and the largest ever by a Chinese semiconductor company, surpassing the record of 46.29 billion yuan set by Semiconductor Manufacturing International Corporation’s listing in 2020. It is also the second-largest public offering on mainland Chinese exchanges since the Agricultural Bank of China’s 2010 listing that raised 68.8 billion yuan.

The funds will be used to expand its mass production lines for memory wafers and upgrade technology for dynamic random-access memory (DRAM). CXMT's DRAM wafer capacity is 300,000 units a month, which is still far below Samsung’s 700,000 units and SK hynix’s 550,000 units.

The company has successfully mass-produced fifth-generation double data rate (DDR5) and low-power variants LPDDR5 and LPDDR5X, and its profitability has been improving rapidly due to recent gains in memory prices. The achievement matters because DDR5 and its low-power variants are the current mainstream memory standards used across PCs, servers, and smartphones. Moving beyond older DDR4 puts CXMT in more direct competition with Samsung and SK hynix in the commodity memory segment that still accounts for a large share of their earnings.

Perspectives diverge on whether CXMT's growth could take a toll on Korean memory giants. Peter Lee, managing director and head of Korea Research at Citigroup Global Markets Korea Securities, argues that growing competition to build better, more efficient AI models will naturally translate into broader demand — and, in turn, demand for more chips.

"Even as Chinese AI chips gain a larger share of the market, memory will still be required, which is expected to bode well for Korean memory makers," Lee told the Korea JoongAng Daily.

"The push toward more efficient AI models and lower-cost service delivery will be a factor that expands the overall AI market. That is expected to drive explosive growth in demand for both high-performance memory and lower-spec, cost-effective memory chips."

The Chinese chipmaker's growth is expected to be driven by the continuing AI boom, experts said. Nomura Holdings projected its memory chip output to grow at 40 to 45 percent a year through 2030, expanding its global DRAM market share to 18 percent by the end of 2028.

“We expect CXMT’s market share gain to accelerate considering that the global supply of memory is unlikely to ease in the coming years,” analyst Donnie Teng wrote, slapping a buy rating and a target price of 116 yuan. “Strong demand for agentic AI will drive a more than sevenfold increase in global memory usage” by 2030.

Even so, the legacy memory market remains dominated by the two Korean companies. Samsung Electronics holds the largest share at 38 percent for the first quarter of 2026, followed by SK hynix at 29 percent, according to Counterpoint Research.

CXMT's market share stands at just 8 percent, but that marks a sharp jump from the 3 percent range it held during the same period in 2025.

Morningstar noted that it will be difficult for CXMT to reduce that gap without access to extreme ultraviolet lithography (EUV), which it lacks due to U.S. export control. EUV is the advanced equipment needed to make semiconductor circuits smaller and more precise.

“Multiples remain strictly under pure-play memory leaders in our coverage given CXMT’s lagging technological capabilities, translating into lower DRAM prices versus its peers,” he wrote, estimating 14.90 yuan per share, which is about one-eighth of Nomura’s price target. “We do not expect this pricing gap — and the corresponding valuation discount — to narrow unless CXMT can overcome the EUV constraint while maintaining economic profitability.”

Meanwhile, CXMT’s mega-scale debut has some experts worried that the market is becoming overheated as prior large-scale IPOs by major competitors have signaled a cyclical peak.

“This AI-driven boom is likely to mark the point at which Chinese memory makers make a full-scale entry into the IT market, a shift that could become a serious burden for Korean players when the next down cycle arrives,” said Lee Min-hee, an analyst at BNK Securities.

NAND flash maker Yangtze Memory Technologies and Kunlunxin, the chip subsidiary of Baidu, are also preparing to go public, along with rumors that AI firms DeepSeek and Moonshot AI could move toward listing before the end of the year as well.

BY LEE JAE-LIM [[email protected]]