ChangXin Memory Technologies (CXMT), China’s largest DRAM maker, posted an 82% operating margin in the second quarter, the highest among major global memory producers.
According to Businesskorea, citing data compiled by Nikkei on Sept. 11, the comparison was based on earnings before interest and taxes, or EBIT, across six major memory companies. CXMT’s 82% came in above Micron’s 80%, SK hynix’s 76%, and Samsung Electronics’ semiconductor division at 70%.
From a JPY 29 billion loss to profit in one year
CXMT had still been posting a loss of JPY 29 billion last year, but turned profitable within a year. Its second-quarter operating profit reached about JPY 1.9 trillion, equivalent to roughly $12.3 billion. Revenue climbed tenfold from a year earlier to JPY 2.3 trillion, the sharpest increase among the six companies in the dataset.
The report linked the jump in profit to a structural shift driven by AI demand. As Samsung Electronics and SK hynix concentrated resources on higher-value products such as HBM, supply of conventional DRAM including DDR5 for PCs and game consoles declined. DDR5 prices then surged, and CXMT, whose product mix is centered on conventional DRAM, became one of the biggest beneficiaries.
DDR5 profitability moved ahead of HBM in Q1
Differences in contract structure also widened the profit gap. HBM is typically supplied to major customers under annual contracts, making it less sensitive to spot-market swings. CXMT’s core DDR5 products, by contrast, move directly with market pricing. TrendForce said DDR5 profitability has exceeded HBM since the first quarter of this year.
The report also pointed to CXMT’s progress in advanced products. Chain News had previously reported that CXMT’s HBM3 yield was only about 25%, with nearly 80 out of every 100 chips failing final testing.
Cash flow turns positive and goes into new capacity
CXMT’s free cash flow turned positive at about JPY 2.2 trillion in the first half of the year. The funds are being used to expand its plant in Hefei, Anhui, and to build a new factory in Shanghai. Priority adoption of domestically produced chips by Chinese technology companies including Alibaba, ByteDance, and Tencent also provided support from local demand.
Market value tops Tencent, while DRAM share remains near 7%
CXMT went public in July and reached a market capitalization of about JPY 87 trillion, surpassing Tencent to become the most valuable company in China’s stock market. Its size is about three times that of Japan’s Kioxia. Its price-to-earnings ratio is close to 20 times, above peers in South Korea and Japan that still trade at single-digit multiples.
By market share, however, CXMT is still a smaller player. The global DRAM market is currently dominated by Samsung Electronics, SK hynix, and Micron, with shares of 39%, 26%, and 25%, respectively. Together they account for about 90% of the market, while CXMT holds about 7%.
Within China’s memory industry, CXMT’s DRAM business and Yangtze Memory Technologies (YMTC)’s NAND flash business form two core pillars. The two companies are working together on next-generation HBM, while the Chinese government is investing funds worth tens of trillions of Korean won through the so-called Big Fund. Local governments and state-backed funds together hold more than half of CXMT’s shares.