China’s CXMT Sees Q3 Revenue as High as $16.7 Billion, Expands DRAM Share to 10%

China’s ChangXin Memory Technologies, or CXMT, is delivering rapid earnings growth as the spread of artificial intelligence drives up demand for DRAM chips. Third-quarter revenue is forecast to rise to roughly seven times the level of a year earlier.

Chinese outlets Yicai and STAR Market Daily reported on Oct. 17 that CXMT, in guidance issued on Oct. 16, projected third-quarter revenue of 114.7 billion yuan to 119.7 billion yuan, or about $16.0 billion to $16.7 billion. That would be up 589% to 619% from a year earlier and 15% to 20% from the previous quarter.

Profit is also forecast to increase sharply. CXMT projected third-quarter net income of 53.4 billion yuan to 54.9 billion yuan, or about $7.4 billion to $7.7 billion. That compares with a net loss in the same period last year.

For the first nine months of the year, cumulative revenue is projected at 265 billion yuan to 270 billion yuan, or about $37.0 billion to $37.7 billion, up 726% to 742% from a year earlier. Net income for the period is estimated at 131 billion yuan to 132.5 billion yuan, or about $18.3 billion to $18.5 billion. In the same period last year, the company posted a net loss of about 5.3 billion yuan.

CXMT said the earnings improvement was driven mainly by a continued shortage of DRAM supply and higher prices as demand for AI computing increased. The company added that expanded production facilities and process improvements lifted wafer output per wafer and equipment utilization, supporting profitability.

Its market share is also rising quickly. Counterpoint Research said CXMT’s share of global DRAM revenue reached 10% in the second quarter, up 6 percentage points from 4% a year earlier.

Samsung Electronics leads the DRAM market with a 38% share, followed by SK Hynix at 25% and Micron at 24%. CXMT ranks fourth globally. While the gap with the top players remains large, the company is expanding its footing by increasing commodity DRAM supply in China’s domestic market.

CXMT raised about 66.6 billion yuan, or roughly $9.3 billion, through its initial public offering when it listed on China’s stock market in July. As of the close on Oct. 16, its market capitalization stood at about 3.06 trillion yuan, or roughly $427.5 billion.