According to Nikkei Asia, CXMT achieved an 82% operating profit margin in the second quarter of this year. This figure surpasses major memory chip manufacturers, including SK Hynix at 76%, Samsung Electronics' semiconductor division at 70%, and Micron. CXMT's revenue grew nearly tenfold compared to the same period last year, marking the highest growth rate among the six major industry players analyzed.
While CXMT leads in quarterly profit margins, its absolute profit scale remains smaller than that of established global leaders. The company specializes in DRAM chips, including DDR5, which are used in data centers, PCs, and gaming consoles. Its client base includes major Chinese tech firms such as Alibaba, ByteDance, and Tencent.
The surge in profitability is linked to shifts in memory supply and demand. As competitors prioritize high-bandwidth memory for AI servers, standard DRAM supply has tightened, driving up DDR5 prices. Unlike HBM, which relies on long-term contracts, DDR5 prices are more sensitive to spot market fluctuations, allowing CXMT to capitalize on the current price cycle.
CXMT is currently expanding production capacity at its Hefei facility using funds from its July IPO and plans to build a new plant in Shanghai. Data from QUICK FactSet indicates that CXMT is now the most valuable listed company in China, with a market capitalization nearly triple that of Japan's Kioxia. Its forward price-to-earnings ratio is near 20, compared to single-digit figures for its peers.
