CXMT forecasts 600% revenue surge to 120B yuan on AI chip boom

China’s top memory chipmaker is forecasting a revenue surge of more than 600 percent for the first half of 2026, a dramatic financial turnaround driven by an AI-fueled boom in global demand for memory that is turning the former loss-maker into a highly profitable enterprise ahead of its landmark IPO.

“The global DRAM market has entered a new growth cycle as AI-driven technologies increase the need for faster and more efficient memory solutions,” Changxin Memory Technologies (CXMT) said in its updated prospectus. The company cited the imbalance between global demand and supply, combined with its own expanding production and improved product mix, for the rapid growth.

In an updated IPO prospectus filed May 17, the Hefei-based company projected first-half revenue of 110 billion to 120 billion yuan ($17.62 billion). That follows first-quarter revenue of 50.8 billion yuan, a 719 percent increase from the year-ago period, which produced a net profit of 25 billion yuan—a sharp reversal from the 1.6 billion yuan loss recorded a year earlier.

The performance signals a historic shift for a company that had accumulated losses of 36.65 billion yuan as of December 2025. The reversal is poised to give CXMT a valuation that could top 1 trillion yuan, solidifying its role as a national champion in China’s push for semiconductor self-sufficiency and a formidable new player in the global memory market.

AI Triggers Historic DRAM Price Spike

The core driver of CXMT’s newfound profitability is a powerful upswing in the memory chip cycle, caused primarily by the explosive growth of artificial intelligence. AI servers require between eight and ten times more DRAM than traditional servers, creating a structural surge in demand. At the same time, the world’s dominant memory producers—Samsung, SK Hynix, and Micron Technology—have shifted significant production capacity to high-bandwidth memory (HBM), a premium product essential for AI accelerators, creating a supply shortage for more conventional DDR4 and DDR5 DRAM.

This supply-demand mismatch has sent prices soaring. According to data from TrendForce cited in the prospectus, DRAM contract prices jumped between 93 and 98 percent in the first quarter of 2026 alone, with another 58 to 63 percent increase expected for the second quarter. This industry tide has lifted all boats; SK Hynix saw its market value approach $1 trillion in May, underscoring the scale of the current boom.

CXMT’s Decade-Long Bet Pays Off

Founded in 2016 by chairman Zhu Yiming, CXMT represents a decade-long, high-stakes gamble on creating a domestic Chinese DRAM champion. As an IDM (Integrated Device Manufacturer), the company designs, manufactures, and tests its chips in-house across three 12-inch wafer fabs in Beijing and Hefei. This strategy, while capital-intensive, has given it control over its production, which reached a 94.6 percent capacity utilization rate in 2025.

The company has successfully transitioned its product line to higher-value DDR5 and LPDDR5/5X chips, allowing it to fully capitalize on the price hikes. This combination of rising prices and high-volume output has been transformative. According to Omdia data, CXMT’s global DRAM market share by sales grew from 3.97 percent in the second quarter of 2025 to 7.67 percent by the fourth quarter, making it the world’s fourth-largest producer.

The IPO on Shanghai’s STAR Market, which aims to raise 29.5 billion yuan, is now one of the most anticipated events in China’s capital markets. While the initial filing implies a valuation around 295 billion yuan, the blowout earnings have analysts projecting a market capitalization between 1 trillion and 2 trillion yuan ($140 billion to $280 billion).

For investors, the key question is the cycle’s duration. While DRAM has historically been a volatile, cyclical industry, some analysts believe the structural demand from AI creates a longer-lasting trend than previous cycles tied to consumer electronics. Still, the risk of a price correction remains a primary concern for valuing a company whose profitability is so tightly linked to commodity-like market dynamics.

This article is for informational purposes only and does not constitute investment advice.