CXMT is all set to tackle the "Big Three" in a significant way in the DRAM segment as it accelerates its memory product roadmap.
DRAM Demand Turns CXMT Into A Major Memory Player, Gunning The Big Three With An Accelerated Roadmap
Yesterday, CXMT made its stock market debut on the Shanghai STAR Board with an $8.6 billion IPO. While the company is valued at around $80-$85 billion, which puts it far below the $1.0 trillion that its competitors are valued at, the company is all set to tackle the "Big Three" big time with a roadmap that includes various products and an initiative that spans a multi-year plan to double/triple its production output.
Currently, CXMT's revenues have surpassed those of various brands such as YMTC, Winbond, and Nanya. According to the revenue plot graph by Counterpoint Research, CXMT is on track to be a major contender in the DRAM landscape, poised to enter the same levels as the Big Three Club: Samsung, SK Hynix, and Micron.
“The timing is extremely interesting with CXMT’s recent market share gains; Apple lobbying, global export consumption and imminent HBM market entry all rounds up to a good growth case. However, the lingering downside risks due to tightening US regulations, still unproven HBM at scale makes it challenging to determine fair comps with peers”, notes, Neil Shah, VP Research at Counterpoint Research.
To enter that league, CXMT still has to command roughly 1/6th of the market revenue. Currently, the company has a global DRAM bit share of 8% while Micron holds 24%, SK Hynix holds 29%, and Samsung holds 36%. At the same time, the entry of CXMT in the market has led to a major decline in Samsung's market share, and this is expected to decline further by 2028, by which time CXMT is expected to capture the market with an 11% share.
Both YMTC and CXMT have previously announced an "EPIC Expansion" plan, which involves the building of major fabs and production lines to expand their capacity. The initial plan is to bump up the wafer output from 320,000 to 420,000 per month by 2027, and the long-term 2030-2035 plan is to further expand on that to drive the next wave of DRAM demand and focus on forward-looking products. The facilities will be set up in Shanghai and Beijing, along with a new cluster in Hefei.
The company wants to accelerate its LPDDR5 and DDR5 lines, making sure they reach a 75% output, along with HBM production. But to do that, CXMT has to overcome various restrictions, such as the ban on advanced lithography equipment by the US Government. The company will have to work on and leverage VCTs (Vertical Channel Transistors) and WoW (Wafer-on-Wafer) bonding.
“The irony here is that actually limiting CXMT could help it leapfrog ahead of the incumbents who are likely to delay such innovations to protect returns on existing equipment,” muses Shah. “CXMT can certainly surprise these peers, turning the export control restraint into a booster to close the gap.”
For its current roadmap, CXMT is aiming to achieve $2 billion in revenue by 2028 as it ramps up its 12-Hi HBM3 DRAM, which is expected to be used by Chinese domestic firms such as Huawei, Cambricon, and Biren Tech. If all goes according to plan, CXMT will have the potential to hit a 15% market threshold by 2035, though external factors and the rising competition from the Big Three will be key considerations for the company as it enters the big league.
About the author: A Software Engineer by training and a PC enthusiast by passion, Hassan Mujtaba serves as Wccftech's Senior Editor for hardware section. With years of experience in the industry, he specializes in deep-dive technical analysis of next-generation CPU and GPU architectures, motherboards, and cooling solutions. His work involves not only breaking news on upcoming technologies but also extensive hands-on reviews and benchmarking.
Follow Wccftech on Google to get more of our news coverage in your feeds.
