ChangXin Memory Technologies (CXMT), China’s top DRAM producer, is reportedly planning to build a second 12-inch wafer fab in Beijing’s Yizhuang area. According to Reuters, CXMT is in financing talks with a tech manufacturing hub that’s backed by the local government. This new Beijing DRAM fab could greatly increase CXMT’s DRAM manufacturing capacity.
CXMT is eyeing expansion following the company’s $8.6 billion IPO last month. Right now, CXMT is China’s most valuable semiconductor company, and it aims to become one of the world’s largest DRAM producers. CXMT is currently building new fabs in Shanghai and Hefei. Once these fabs are fully operational, CXMT will reportedly be able to produce more than 600,000 wafers per month. This is double CXMT’s current manufacturing capacity.
Right now, there is not enough DRAM manufacturing capacity to meet demand. This has caused DRAM pricing to skyrocket. High DRAM prices have given CXMT a huge cash injection, an ideal time to go public, and guaranteed sales for all the DRAM it can produce. If CXMT can expand quickly, it can gain significant market share from Samsung, SK Hynix and Micron. If you can build DRAM, you will have buyers. That’s how today’s DRAM market works.
While CXMT’s DRAM cannot be sold in the US due to import restrictions, its increased manufacturing capacity will alleviate the strain on the global DRAM market. If CXMT can expand faster than its rivals, the company will gain market share, making its size more comparable to the world’s largest DRAM producers.
Currently, the combined DRAM market share of Samsung, SK Hynix, and Micron is almost 90%. CXMT’s growth could see the market share of these DRAM giants decline, bringing fresh competition to the DRAM market. In time, CXMT’s influence could cause DRAM pricing to lower. That said, it can take years to build new fabs, and it will take time for increased supply to lower DRAM pricing.
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