CXMT tops 4 trillion yuan as AI-fuelled memory rally lifts China’s chip champion

Shares of ChangXin Memory Technologies (CXMT), China's leading DRAM maker, surged 12 percent on Monday, closing at a record 61.80 yuan (US$9.16) and propelling its market capitalization to an astounding 4.13 trillion yuan. This marked a significant milestone, as CXMT overtook Hong Kong-listed Tencent Holdings to become China's most valuable listed company.

The Hefei-based chipmaker had already claimed the title on mainland exchanges since its July 27 trading debut, when its stock surged 466 percent, more than seven times its initial public offering price of 8.66 yuan. The recent jump in CXMT's share price appeared to be driven largely by sector-wide factors. SanDisk shares experienced a near 30 percent surge on Thursday and Friday, following its investor day presentation, which reinforced expectations that AI demand could keep memory supplies tight.

Micron Technology also gained 6.7 percent last Friday, further adding to the momentum in the memory sector. SanDisk had reported robust quarterly results earlier in the month and forecasted solid long-term growth and margins at its investor day, boosting confidence in the memory upcycle. Nomura, a Wall Street research firm, highlighted the investor day as providing greater long-term visibility into the NAND market, citing SanDisk's forecast that solid-state drive (SSD) shipments for AI data centers could reach 1,200 exabytes in 2030, an exabyte being equivalent to 1 million terabytes.

Bernstein, another research firm, expressed a more bullish stance on SanDisk, arguing that the AI shift from a "compute-centric" to a "memory-centric" architecture, driven by larger models and longer context windows, would increase memory requirements. This, in turn, could keep memory supplies tight for longer due to SanDisk's planned high-bandwidth flash technology potentially consuming substantial wafer capacity.

UBS initiated coverage of CXMT with a "Buy" rating and a price target of 70 yuan, expecting global DRAM undersupply to persist until at least the second quarter of 2028. The bank also forecasted CXMT's capacity to increase to 466,000 wafers per month by the end of 2028, up from 240,000 at the end of 2025, which would lift its share of global DRAM bit supply to around 10 percent from 7 percent.

CXMT has been a major beneficiary of the memory upcycle, with its first-quarter revenue jumping 719 percent year on year to 50.8 billion yuan and net profit reaching 24.8 billion yuan, reversing a loss from the previous year. As China's AI boom continues to accelerate, CXMT is not the only company reaping the benefits. Domestic AI developer SenseTime reported that it is expected to turn a profit in the first half of the year, marking its first consolidated profit since its listing in 2021. If confirmed in official earnings results, this would be a significant milestone for the company.