China's Changxin Memory Technologies (CXMT) posted one of the world's highest operating margins in the global memory chip market by selling commodity DRAM, capitalizing on a gap left as South Korean chipmakers shifted their focus to high-bandwidth memory (HBM).
Japan's Nikkei analyzed second-quarter results from April to June for Samsung Electronics and SK hynix of South Korea, Micron and SanDisk of the United States, Kioxia of Japan and CXMT of China, and found that CXMT's operating margin reached 82% during the period, topping SK hynix at 76% and Samsung Electronics at 70%, according to a report on the 11th.
The gap emerged because SK hynix and Samsung Electronics prioritized supplying HBM — DRAM chips stacked in multiple layers and essential for artificial intelligence servers — which reduced their output of commodity memory. That shift drove a sharp increase in prices for DDR5, the commodity DRAM product at the core of CXMT's business. Taiwanese research firm TrendForce said HBM profitability has fallen below that of DDR5 since the January-March period.
CXMT counts major technology companies including Alibaba, ByteDance and Tencent among its customers. Meeting DRAM demand from those firms, the company posted second-quarter operating profit of about 1.9 trillion yen (about 16.57 trillion won), a steep turnaround from a loss of 29 billion yen (about 253 billion won) a year earlier. Beyond overtaking Samsung Electronics and SK hynix on margin, CXMT has already surpassed Kioxia and SanDisk in the absolute size of its profit.
