CXMT and Tencent Sign Over $2.8 Billion Chip Supply Deal, DRAM Capacity to Double
People familiar with the matter say Chinese memory chip maker ChangXin Memory Technologies (CXMT) has signed a long-term server DRAM supply agreement with Tencent valued at over 20 billion yuan ($2.8 billion). Two sources say the deal spans three years, while a third says five years. It is unclear whether it includes HBM memory crucial for AI chips, but the partnership aims to provide stable server memory for Tencent's cloud services, databases, and AI workloads. CXMT is also preparing for an initial public offering on the Shanghai Stock Exchange's STAR Market, targeting 29.5 billion yuan ($4.1 billion).
CXMT is aggressively expanding production to address tight global memory supply and surging prices. DRAM contract prices surged about 95% quarter-over-quarter in Q1 2026, with the upcycle expected to last through 2027. Riding the boom, CXMT's Q1 2026 revenue skyrocketed 700% year-over-year to 50.8 billion yuan ($7 billion), with a net profit of 25 billion yuan ($3.5 billion), turning profitable. Beyond its existing three 12-inch wafer fabs in Hefei and Beijing, plus an HBM packaging facility in Shanghai, CXMT has begun construction of a new DRAM fab in Shanghai. Once operational, monthly capacity will double from 300,000 to 600,000 wafers.
Chinese internet giants are racing to secure domestic semiconductor supply chains. Besides Tencent, CXMT is in talks with other major Chinese internet companies. Its IPO prospectus lists Alibaba Cloud, ByteDance, Lenovo, and Xiaomi as customers. However, CXMT still faces yield challenges: its next-generation DDR5 memory products suffered low yields in Q1 2026, highlighting the technology gap with industry leaders like Samsung and SK Hynix.