CXMT, China's largest DRAM maker, has entered the final countdown to a massive initial public offering (IPO) worth more than 6 trillion won. Through the large-scale fundraising, the company is expected to accelerate capacity expansion and technology upgrades as it pursues Samsung Electronics (005930.KS) and SK hynix (000660.KS).
CXMT said on the 9th, in a prospectus submitted to the Shanghai Stock Exchange, that it will conduct online and offline subscriptions for new shares from the 16th. The expected listing date is around the 24th of this month. The 29.5 billion yuan (about 6.53 trillion won) raised through the IPO will be allocated to capacity expansion (7.5 billion yuan), DRAM technology development (13 billion yuan), and next-generation research and development (9 billion yuan).
Founded in 2016 in Hefei, Anhui Province, CXMT is China's only mass producer of DRAM. Backed by the artificial intelligence (AI) boom, it raised its global DRAM market share from around 3% last year to about 8% this year. First-quarter revenue this year reached 50.8 billion yuan, up 719% from a year earlier, while net profit surged 1,688% to 24.762 billion yuan.
The industry views CXMT's IPO as a turning point in China's semiconductor rise. China raised its memory chip self-sufficiency rate from around 5% several years ago to 25% this year and is projected to reach 30% by 2028. If CXMT succeeds in the large-scale capital raise, this trend is expected to gain further momentum. A trickle-down effect is also anticipated across China's broader semiconductor supply chain, including equipment and materials.
Attention has focused in particular on recent reports that Apple has been sounding out purchases of CXMT's DRAM. The Financial Times (FT) reported on the 8th that Apple is testing CXMT products for devices sold in China and is leading lobbying efforts to seek U.S. government approval for broader use of the company's products.
However, its limitations are clear in high-value products such as high-bandwidth memory (HBM). While Samsung Electronics and SK hynix have entered a race to mass-produce HBM4, CXMT aims to mass-produce HBM3E next year, which trails by about one to two years in technology. This prospectus also did not include a separate investment plan to expand HBM production. In terms of actual revenue share, low-power DRAM (LPDDR) for mobile phones and tablet PCs accounts for 66.43%, while DDR for PCs and servers accounts for 31.87%. Its meager overseas revenue share of just 2.79% (excluding Hong Kong) also remains a challenge.
