China’s CXMT Reports 719% Revenue Jump, Becomes World’s No. 4 DRAM Maker

Chinese memory-chip maker ChangXin Memory Technologies, or CXMT, posted first-quarter revenue growth of more than 700% as the artificial-intelligence boom boosted demand.

CXMT Rides AI Boom as First-Quarter Revenue Surges 719%

Net Profit Tops $4.6 Billion, Up 1,268% From a Year Earlier

First-Half Revenue Growth Forecast at More Than 600%

CXMT, China’s largest memory-chip company, said first-quarter revenue rose 719.13% from a year earlier to 50.8 billion yuan, or about $7.0 billion, according to an investment prospectus released on May 17 ahead of its planned initial public offering. Chinese media outlets including TechBoard Daily and Hongxing News reported the filing on May 18.

Net profit for the quarter climbed 1,268.45% to 33.012 billion yuan, or about $4.6 billion. Net income attributable to the parent company jumped 1,688.3% to 24.762 billion yuan, or about $3.4 billion. The measure refers to the portion of consolidated earnings ultimately attributable to the parent company’s shareholders.

CXMT’s first-quarter revenue and net income attributable to the parent surpassed those of all companies listed on China’s STAR Market, including Semiconductor Manufacturing International Corp., or SMIC, the country’s largest foundry.

Its first-quarter net income attributable to the parent ranked 13th among all A-share companies, the yuan-denominated common shares issued by Chinese companies on the mainland.

For the first half, CXMT forecast revenue of 110 billion yuan to 120 billion yuan, or about $15.2 billion to $16.6 billion, up 612.53% to 677.31% from a year earlier. It projected net income attributable to the parent at 50 billion yuan to 57 billion yuan, or about $6.9 billion to $7.9 billion, a rise of 2,244% to 2,544%.

The company put first-half net profit at 66 billion yuan to 75 billion yuan, or about $9.1 billion to $10.4 billion.

CXMT said semiconductor prices have kept rising since the second half of last year, driving a rapid improvement in gross margin and helping the company return to profitability last year. It added that DRAM supply lagged demand in the first quarter as global computing demand continued to expand and major manufacturers adjusted capacity allocation. DRAM prices have risen sharply since the second half of last year, it said.

Guo Yanyang of Taixin Capital Investment attributed the strong results to the upcycle in memory prices, along with CXMT’s technological advances and efficiency gains. He described CXMT as China’s largest and most technologically advanced integrated DRAM producer.

CXMT operates three 12-inch DRAM wafer plants in Beijing and Hefei, Anhui province. Data from Omdia show the company ranks first in China and fourth globally in production capacity, shipments and revenue.

Samsung Electronics Co., SK Hynix Inc. and Micron Technology Inc., the world’s three largest DRAM makers, account for more than 90% of the market. Omdia data show CXMT’s share of global DRAM sales rose to 7.67% in the fourth quarter of last year.

CXMT plans to raise 29.5 billion yuan, or about $4.1 billion, through an IPO this year and use the proceeds for wafer production lines and DRAM technology upgrades.

Ko Jung-sam, Hankyung.com reporter jsk@hankyung.com