CXMT targets $8.6B IPO as it prepares for Shanghai debut

Ten years after breaking ground on its fab construction, CXMT is now preparing for its stock market debut on the Shanghai STAR Board on July 16 (688825.SH), raising RMB 57.9 billion ($8.55 billion). At 8.66 RMB per share, CXMT is listing at around $80-85 billion, or under a tenth of SK Hynix or Micron, each now oscillating at the $1 trillion level.

“Are we going to see a re-rating story as CXMT’s share climbs or are we peak DRAM cycle which is being reflected in tier-1 market caps,” says MS Hwang, Research Director at Counterpoint Research.” The gap is still considerable now, but the big question is how soon CXMT can close the gap with this upcoming capital influx?”

For CXMT the north star is to break into the “Big Three” club and become a strategic market leader in the booming memory market in terms of market share and mindshare. According to Counterpoint Research’s latest Global Memory Market report CXMT From Challenger to a Strategic Player, CXMT needs to command at a minimum around one-sixth of the DRAM market.

“If you look at what happened in Taiwan in 2008, its DRAM makers slipped under 15%, couldn’t fund the next fab and collapsed to around 3% share into a niche status,” states Hwang, “That’s the line CXMT has to cross and everything they’re building now is a race to get there first.”

Can CXMT unlock the leadership status?
With the capital injection, CXMT aims to double capacity by 2030 and triple it by 2035. Shorter term, the company will expand from its current 320,000 to 420,000 wafers per month by 2027 via new fabs in Shanghai and Beijing and a vast new Hefei cluster. As it scales, its mix shifts up-market toward LPDDR5 and DDR5 which will approach 75% of output, with PC and server-grade parts now reaching global OEMs. This is the first critical step for CXMT.

“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.

The longer-term issue is CXMT being barred access to advanced lithography tools, which is forcing the company to pursue alternative technologies like Vertical Channel Transistors (VCT) and Wafer-on-Wafer (WoW) 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.”

In summary, here are the four key vectors Counterpoint will be tracking among many others post CXMTs’ IPO:

• HBM Progress: 12-hi stack HBM3 yield at scale with $2B revenue potential by 2028 from Huawei Ascend scaling, Cambricon and Biren in evaluation which will be the critical unlock for CXMT’s valuation case
• Non-Chinese OEM orders at scale: PC supply chain entry (commenced mid-2025) needs to convert to volume orders; Apple remains a wildcard to ensure political clearance
• US-China trade escalation returning CXMT to Commerce Dept. crosshairs would impair equipment procurement and non-Chinese customer relationships
• Market Share Trajectory: Counterpoint base case is 11% DRAM bit share (9% in revenue) by 2028, breaking the 20%-bit share and 15%-revenue threshold by 2035 the key milestone to watch.

Counterpoint Research