For China's Memory Chipmakers, Profits and Listings Bolster Global Stature

Major Chinese memory chipmakers reported first-half net profit increases of up to 20-fold due to rising memory prices for smartphones, PCs and AI data centers.

Domestic semiconductor firms are experiencing explosive growth as investors look to capitalize on this trend.

Chinese mainland industry leaders ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies are outperforming Micron and SK Hynix as they move up the global tech ladder through major public listings.

A market of demand exceeding supply will persist through 2028, and Chinese manufacturers are having "a significant disruptive impact on the global memory supply landscape," said Jimmy Yu, an analyst at UBS China.

The Swiss banking giant's analysts project that Chinese memory-chip makers will increase their global market share from 7 percent in 2025 to 11 percent within the next two years.

Beyond market conditions and pricing power, Chinese memory chipmakers are benefiting from Beijing's long-term strategy to build self-reliance in domestic technology supply chains, backed by innovation-focused capital markets.

CXMT became a market darling after executing the largest IPO ever on Shanghai's Nasdaq-style STAR Market and the biggest listing in Asia this year.

The company raised 51.9 billion yuan (US$8.6 billion) in the share sale, with the stock surging 465 percent in its July debut.

The Hefei-based company, China's top maker of dynamic random-access memory (DRAM) chips and the fourth-largest globally, swung to profitability in the first half on strong AI demand and constrained global supplies.

Net profit reached 77.6 billion yuan, reversing from a loss of 2.3 billion yuan a year earlier, while revenue jumped 874 percent to 150.3 billion yuan.

CXMT secured a 20-billion-yuan supply deal with Tencent, according to media reports, expanding a client list that already includes major tech players such as Alibaba Cloud, Lenovo, Xiaomi, Oppo, Vivo, Transsion and Honor.

Among other star earnings performers is GigaDevice Semiconductor, a leading designer of flash memory chips listed on Shanghai and Hong Kong exchanges. It reported an 11-fold surge in first-half profit to 6.9 billion yuan, with revenue growing 179 percent to 11.6 billion yuan.

Yangtze Memory may repeat CXMT's Shanghai IPO success after receiving regulatory approval. The Wuhan-based company will reportedly seek to raise 33 billion yuan. It manufactures NAND flash chips for smartphones, SSDs and data centers.

The company is taking market share from SanDisk and Kioxia, competing with international giants like SK Hynix, Micron and Samsung.

Yangtze Memory has been actively expanding its commercial outreach. At ChinaJoy, Asia's largest gaming expo in Shanghai, the company showcased memory solutions optimized for AI workloads alongside its consumer-facing brand ZhiTai.

Another widely watched IPO will be the listing of Shenzhen-listed memory module maker Longsys, expected to start trading in Hong Kong on September 8.

Longsys on Friday priced its initial public offering in Hong Kong at HK$236 (US$30) a share, aiming to raise HK$6.2 billion. The company said it would allocate about 78 percent of the net proceeds to research and development for chip design and advanced memory.

The Shenzhen-based company posted first-half net profit of 10.6 billion yuan, a 715-fold surge from a year earlier. Revenue rose 136 percent from a year earlier to 24.1 billion yuan.

As a maker of memory modules – the printed circuit boards containing memory integrated circuits – the company has ridden the broader wave of tight global chip supplies.

In the Shanghai IPO pipeline is Enflame Technologies, a Chinese maker of graphic processing units that began its share sale last week, with the retail portion 4,100 times oversubscribed.

The company expects to raise 6.12 billion yuan to fund research, development and production of its fifth- and sixth-generation AI chips.

These chipmakers are playing a critical role in the broader US-China technology landscape, particularly as domestic firms navigate strict US export restrictions on semiconductors.

CXMT's entire production network – from raw materials and silicon wafers to packaging and testing – is deeply anchored within China's domestic ecosystem, drawing on more than 30 Chinese mainland-listed suppliers.

Reports indicate that Apple has been evaluating CXMT as a memory supplier for iPhones and other hardware sold in China, alongside traditional vendors like Micron and Samsung. For Apple, adding CXMT offers a hedge against rising global memory costs.

Industry analysts observe that Apple's consideration of CXMT signifies the company's technology is achieving parity with international leaders, which is an important turning point in China's broader semiconductor ambitions.

CXMT produces high-bandwidth memory HBM3E chips, one generation behind global market leaders. According to media reports, Alibaba subsidiary PingTouGe Semiconductor and AI chip firm Cambricon are testing HBM3E chips and plan to integrate them into commercial processors next year.

This domestic alternative provides crucial momentum in China's AI rivalry with the US, where the Trump administration has been trying to undercut China's emerging clout.

Analysts at UBS said the memory and semiconductor equipment sectors are among the most compelling opportunities in China's equity markets, due to clear earnings track records and high growth potential.

The capital market is efficiently allocating resources to sectors boasting the strongest technologies and growth potential, said Felix Fei, managing partner of Ernst & Young's Shanghai branch.

Following its public listing, CXMT is set to become the most profitable listed company on both the STAR Market and Shenzhen's tech-focused ChiNext board.