As the , and SK Hynix. Its market share is believed to be somewhere around 8% of the worldwide market, with most of its customers in its native China.
CXMT does not make the High Bandwidth Memory (HBM) that is in such high demand for AI accelerators these days, but it does make DDR5 memory, and that is in very short supply as well. So, buyers will take whatever they can get.
On the financial side, CXMT and can now sell their products in the US. That means that they can not only sell to the US commercial market but also bid on US government contracts.
So, can CXMT have an impact on the memory industry?
Memory analyst Jim Handy of Objective Analysis says it already has. CXMT got into DDR4 in 2023 while the majors were focusing on their DDR5 ramps, and it has undercut the big three memory makers, he said.
DDR4 prices got so low that the majors all phased out of DDR4 production. Then CXMT learned to make DDR5 and dropped out of DDR4 to make more DDR5. For a while, this made DDR4 prices rise higher than DDR5. “Everyone in the industry was surprised when this happened,” Handy said.
“Now the majors are making 80% — give or take — gross margins on DRAM. Even a company whose cost to manufacture was twice that of its competition would make a 60% gross margin in this case, so the market is greatly favoring CXMT — for the time being,” he added.
But there is risk for CXMT. DRAM is a commodity, which makes it subject to the typical glut and shortage patterns that are driven by supply and demand imbalances.
“Today’s AI-driven shortage will reverse at some point. When it does, the majors will see prices drop to cost. If CXMT’s costs remain higher than everyone else’s, the company will hemorrhage money during that period,” said Handy.
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