Tencent Backs CXMT
CXMT Secures Multiyear Tencent DRAM Deal Valued Over 20 Billion Yuan Ahead of IPO
Anonymous
Key Points
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CXMT's capacity footprint shows a multi-site operation: two 12-inch fabs in Hefei and one in Beijing, with a combined monthly capacity of about 300,000 wafers, plus a Shanghai DRAM plant under construction and an existing Shanghai facility focused on HBM packaging.
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CXMT's STAR Market IPO is planned for about 29.5 billion yuan, and the company posted first-quarter revenue of 50.8 billion yuan, up roughly 700% year-on-year.
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CXMT is described as China's largest DRAM maker, and Tencent's multi-year DRAM supply deal is framed as a major endorsement of CXMT's rising role in the domestic memory market.
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UBS notes DRAM contract pricing is rising and cites a broader memory-market outlook, with projections of the market reaching about $786 billion in 2026 and around $1.2 trillion in 2027.
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CXMT was founded in 2016 with government backing, underscoring China's strategic push to develop domestic memory capability and localize semiconductor supply.
China's largest DRAM maker, ChangXin Memory Technologies (CXMT), has signed a multiyear supply deal with Tencent worth more than 20 billion yuan — roughly $2.94 billion — to deliver server memory over three to five years, according to Reuters. The agreement is the largest domestic memory contract in Chinese history and comes just days after regulators approved CXMT's planned 29.5 billion yuan IPO on Shanghai's STAR Market.
The timing is no accident. CXMT posted first-quarter 2026 revenue of 50.8 billion yuan — a 719% jump year-on-year — as global DRAM prices have nearly doubled over the past 12 months, driven by surging AI server demand, Wccftech reported. The Tencent deal cements CXMT's transition from a government-backed experiment into a full-scale commercial supplier.
Tencent Bets Big on a Homegrown Memory Supplier
For years, Chinese tech giants like Tencent relied almost entirely on Samsung, SK Hynix, and Micron for server memory. U.S. export controls from 2022 to 2024 forced a rethink. Now Tencent is locking in a domestic source. The deal covers standard server DRAM, though whether it includes HBM — high-bandwidth memory used in AI chips — has not been disclosed, according to Seoul Economic Daily.
UBS analysts say the move is strategic, not ceremonial. The bank noted that Tencent is "sourcing memory at scale from a domestic supplier, not merely as a diplomatic show of support." UBS projects the global memory market will hit $786 billion in 2026 and roughly $1.2 trillion by 2027, making reliable supply agreements critical for any cloud operator.
CXMT's Factories Are Expanding at a Rapid Pace
CXMT currently runs two 12-inch wafer fabs in Hefei and one in Beijing. Together they produce about 300,000 wafers per month, according to Wccftech. A fourth plant — a massive DRAM facility in Shanghai — is under construction and is expected to push monthly output to 600,000 wafers once complete. A separate Shanghai site already handles HBM packaging.
CXMT was founded in Hefei in 2016 with backing from China's National Integrated Circuit Industry Investment Fund, known as the "Big Fund," as Digitimes noted. The company began mass-producing DRAM in 2019. Its global market share climbed from 3% in Q1 2025 to 8% in Q1 2026, a rise that is putting real pressure on the traditional big three.
IPO Looms as CXMT Courts More Tech Giants
China's securities regulator greenlighted CXMT's STAR Market IPO in June, targeting 29.5 billion yuan — potentially the second-largest listing in the market's history after SMIC. The Tencent deal gives IPO investors a concrete revenue anchor. CXMT is also reportedly in talks with other large Chinese internet firms, including potential deals with Alibaba Cloud and ByteDance, according to Reuters.
The company's financials back the optimism. Net profit reached 25 billion yuan in Q1 2026, a dramatic swing from a 1.6 billion yuan loss in Q1 2025. Apple has also reportedly lobbied the U.S. government for permission to source DRAM from CXMT, the Seoul Economic Daily noted — a sign that even Western firms now see CXMT as a credible, cost-effective option.
Analysts See Upside but Flag Real Technical Gaps
Not everyone is fully convinced. Some analysts note that CXMT's yield rates on next-generation DDR5 memory still trail Samsung and SK Hynix. "If yields stay low, the deal's practical value for demanding AI workloads will be constrained," one industry note warned, as Wccftech reported. DDR5 is faster and more efficient than older DDR4 chips — exactly what high-end AI servers need.
The bigger wildcard is HBM. If CXMT's Shanghai packaging plant successfully scales high-bandwidth memory for domestic AI accelerators like Huawei's Ascend chips, analysts say the company's valuation could surge further after the IPO. For now, the Tencent deal is the clearest proof yet that China's semiconductor self-sufficiency drive is moving from policy paper to purchase order.
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