Chinese Memory Leader CXMT’s Sales Surge Yet Growth Slows

CXMT Corp. posted a sevenfold surge in quarterly revenue, though the pace of acceleration slowed in a sign that an AI-fueled rally in Chinese memory chip prices may be losing steam.

The country’s most valuable chipmaker reported revenue of 118.7 billion yuan ($17.8 billion) for the three months ended September. That’s up 613% from a year ago, but a rise of just 19.3% from the June quarter — far more modest rise than the 90%-plus jump it managed in the second quarter from the first. The company also swung from a loss to a net income of 54.4 billion yuan, after aggressive expansion to shore up its role as a global supplier of conventional memory or DRAM.

Investors are closely watching CXMT as Beijing seeks to nurture its own chip champions to propel an AI competition with the US, and reduce a reliance on global leaders from Samsung Electronics Co. to Micron Technology Inc. CXMT poured 11 billion yuan into research in the first nine months, up 73% from a year ago. It’s now pushing for a newer generation of memory, with sample DRAM products now in a validation phase, the company said. The memory maker plans to buy back shares worth no more than 2 billion yuan, half of which will be used as employee stock incentives.

CXMT’s report — which follows eye-popping growth numbers from SK Hynix Inc. and Samsung this week — suggests it’s getting tougher to sustain the immense price increases that roiled the market this year. The company mainly sells conventional memory to consumer electronics and server firms, which’ve been squeezed by shortages because memory producers are prioritizing the high-bandwidth memory used for AI.

That’s created a windfall for CXMT, helping expand the company’s global market share from just 4% a year ago to 10% by the end of the second quarter. But those steep price hikes are also hurting demand from clients, forcing smartphone makers from Xiaomi Corp. to Oppo to reduce output of low-end devices.

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Consumer electronics customers are pushing back and curtailing CXMT’s pricing power, according to Jing Jie Yu, an analyst at Morningstar. Conventional memory price growth should moderate in the second half of 2026, according to research firm TrendForce.

“Consumer electronics still make up roughly 30-40% of global memory demand, and we think this pushback will lead to earnings plateauing over the next few quarters.” Yu said.

In the longer-term, CXMT is trying to break into the business of supplying top-tier HBMs for AI accelerators, while researching techniques to advance in manufacture without access to US-sanctioned chipmaking equipment.

The company has been making incremental technology upgrades, with a so-called fifth-generation production platform to enhance its memory products’ cost effectiveness. This month, it disclosed a new memory cell architecture called 4F², underscoring how the Chinese firm is trying to close the technological gap. The revelation help sparked a broader selloff of memory giants’ shares.

While CXMT’s progress may pose a threat to the incumbent memory leaders in the long run, “it is not yet at a stage to fundamentally shift the market’s competition dynamics,” said MS Hwang, an analyst at Counterpoint Research.