China's CXMT Arms Itself With $1.5 Billion War Chest, Raising Pressure on Korea's Memory Stronghold

ChangXin Memory Technologies (CXMT), China's largest DRAM maker, is expected to raise about 1.3 trillion won through its initial public offering (IPO) after institutional and retail subscriptions each drew competition ratios of several hundred to one. CXMT plans to use the funds raised through the IPO to expand production capacity and invest in research and development (R&D), signaling a full-scale push to catch up in the global DRAM market dominated by Samsung Electronics and SK hynix. Some observers say the expansion of supply by Chinese chipmakers could weigh on DRAM prices and the profitability of Korean memory companies over the medium to long term.
According to an announcement posted on the Shanghai Stock Exchange (SSE) on the 20th detailing the allocation results for institutional and retail investors, valid institutional subscriptions totaled 1,238,222,100,000 shares. Of that amount, 2,173,133,388 shares were finally allocated to institutions, putting the subscription competition ratio at about 570-to-1. In other words, one share was allocated for every 570 shares ordered by institutions.
Retail investors also submitted orders amounting to about 244 times the initial allocation. The initial valid subscription competition ratio for retail investors came in at 243.93-to-1, while the final allotment rate was only 0.47%. CXMT set its offering price at 8.66 yuan per share, or about 1,900 won. By issuing 6,688,088,608 shares, the company will raise about 57.9 billion yuan, or roughly 1.3 trillion won. If the greenshoe option is fully exercised, the total amount raised will rise to as much as 66.6 billion yuan, or about 1.46 trillion won. That would make it the largest IPO in Asia.
CXMT plans to channel the proceeds into upgrading its production line technology, advancing DRAM technology, and developing next-generation DRAM technologies. In particular, it is also accelerating its entry into the high-bandwidth memory market and is reportedly expanding production and packaging capabilities related to HBM3, with the goal of mass production by the end of this year.
Industry watchers say a technological gap still exists between Samsung Electronics and SK hynix on one side and CXMT on the other, and that it will be difficult to close that gap in the short term. Korean chipmakers are seen as having the edge in advanced process technology, product performance, yield, and customer certification. Still, as the global memory market remains tight, CXMT could emerge as an alternative supplier in the commodity DRAM segment if it moves ahead with large-scale capacity expansion. Even if it cannot quickly match the competitiveness of advanced products, it could build production scale and mass-production experience and expand its market share starting with commodity products.
According to Counterpoint Research, CXMT currently holds a 9% share of the global DRAM market by bit shipments, ranking fourth behind Samsung Electronics, SK hynix, and Micron. The firm is expected to narrow the gap quickly, with its share projected to rise aggressively to 11% in 2028 and 20% in 2035.
[email protected] Jung Won-il Reporter