China's memory chip manufacturer CXMT saw its stock price surge significantly after listing in Shanghai, with its market capitalization reaching 3.54 trillion yuan by the weekend, surpassing Industrial and Commercial Bank of China in a short time to become China's most valuable publicly listed company. Foreign media believe this rally reflects both the shortage of memory chips driven by AI demand and once again highlights the true competitiveness of China's semiconductor industry.
Market capitalization rose rapidly during the first week of listing.
CXMT listed in Shanghai on July 27, with its stock price surging over 500% on the first day and continuing to rise in the following days, closing at ¥57.60 on Friday. Market attention quickly shifted from the initial hype surrounding the new listing to deeper questions: Does this signal that Chinese memory chip companies are beginning to reshape the global AI supply chain?
The commentary notes that the answer is not yet clear. Barbora Valockova, a researcher at the Lee Kuan Yew School of Public Policy in Singapore, said that China’s importance in the memory chip sector is indeed rising, but the current market is simultaneously influenced by surging AI demand, supply shortages, and industrial policy support—factors that do not yet indicate China has fully caught up with leading companies across the entire chip ecosystem.
Overseas customers still prefer diversified sourcing.
The article notes that, amid global storage shortages, companies are indeed more actively evaluating Chinese suppliers, but adoption may still be limited, particularly in the U.S. market, where political factors are more likely to have an impact. On July 30, bipartisan U.S. lawmakers sent a letter to Apple CEO Tim Cook urging Apple to cease sourcing chips from Chinese semiconductor companies listed by the U.S. government, including CXMT and YMTC.
Apple previously approached these two companies regarding procurement. Cook also acknowledged on the earnings call that current memory prices are in an extreme upward phase, with limited flexibility in the supply chain. This means that price and supply pressures are compelling end manufacturers to expand their alternative sourcing options.
However, several analysts believe that major international companies are more likely to view CXMT as a secondary supply source rather than a core supplier in the short term, due to ongoing geopolitical risks and gaps in product performance and manufacturing costs compared to SK Hynix, Samsung, and Micron.
- Some argue that CXMT remains two to three generations behind international leaders in product development.
- On a per-bit cost basis, its manufacturing cost may be 20% to 30% higher.
- Therefore, global customers are more likely to adopt a multi-location, multi-source procurement strategy.
The AI boom amplifies China's chip advancements
Despite ongoing technological gaps, the listing of CXMT and recent advancements by Chinese AI companies have shaken the global tech market. Reports note that NVIDIA's stock once dropped 5%, and South Korea’s SK Hynix and Samsung also saw significant declines, indicating that investors are reassessing the role of Chinese firms within the AI supply chain. However, following stronger-than-expected AI spending forecasts from Microsoft and Amazon, the semiconductor sector rebounded by Friday.
Some researchers also hold a more optimistic view regarding the speed at which Chinese manufacturers will catch up. The article cites scholars from the East Asian Institute at the National University of Singapore, who note that Chinese companies can leverage their domestic capital markets and government support to rapidly expand production capacity and R&D investment, thereby narrowing the gap with overseas industry leaders.
The report also noted that, according to The Information this week, an unnamed Chinese company has begun producing immersion deep ultraviolet lithography machines. Such equipment is one of the critical components in chip manufacturing and has long been dominated by overseas manufacturers like ASML. If this progress continues, China’s semiconductor industry may further enhance its domestic supply chain capabilities.
Yangtze Memory Technologies is entering the preparatory stage for its listing.
The article concludes by noting that YMTC has now entered the pre-IPO stage for listing on the Shanghai Stock Exchange. If subsequent progress proceeds smoothly, investors will have another opportunity to bet on China’s semiconductor sector.
Overall, foreign media view CXMT’s surge as a result of combined factors: AI storage shortages, capital enthusiasm, and policy support. Chinese memory chip companies are becoming increasingly important, but they still have a way to go before fully catching up with leading global players in the semiconductor industry.