Tech stocks tumbled on Tuesday after a Chinese memory chip maker said it had made significant progress in developing a new, more efficient design.
ChangXin Memory Technologies (CXMT) announced over the weekend that it has advanced the development of a new architecture that increases memory density by packing more data into a smaller space.
The announcement surprised the market, as CXMT is China’s biggest rival to global memory manufacturers. micronSK Hynix and Samsung.
And until its recent blockbuster IPO, it was largely unknown outside its domestic market.
micron fell 3.7% in pre-market trading, SK Hynix’s South Korean-listed shares closed 10% lower, and Samsung Electronics fell 7.4%. Other memory-related stocks, sandisk, seagate and western digitalall were low.
Blockbuster IPO
CXMT attracted global attention with its initial public offering in July.
The company soared nearly 466% on its listing on Shanghai’s tech-heavy STAR market, making it China’s most valuable listed company at the time.
The stock has since fallen 4% from its IPO day price of 49 yuan per share, but the company’s market capitalization remains at 3.46 trillion Chinese yuan ($520 billion), far behind tech giant Tencent’s 3.87 trillion yuan.
Headquartered in Hefei, CXMT was listed for the first time in about 10 years since its establishment in 2016.
One of the biggest questions for CXMT after its IPO was whether it could close the capability gap with Micron, Samsung and SK Hynix, especially in high-bandwidth memory, a key component of AI chip systems.
While huge domestic demand is supporting CXMT, it still faces challenges in accessing chip-making equipment, which is effectively banned from China due to U.S. export controls. ASMLextreme ultraviolet (EUV) lithography machines are necessary for manufacturing cutting-edge semiconductors.
CXMT reportedly plans to roll out new server memory products based on a new cell architecture by the end of 2026.
The new design is based on “4F Square” technology and allows for higher storage density. SK Hynix is also pursuing the 4F square design, and SK Hynix has presented a roadmap for the development of this technology in 2025.
CXMT is often viewed by analysts as lagging behind its global competitors on the memory development front, and breakthrough news could have a significant impact on investors’ perceptions of its global competitors’ market dominance.
market profit
CXMT has made significant gains in the market despite challenges related to export controls.
HSBC’s Thursday note said its share of the global dynamic random access memory (DRAM) market rose to about 10% from about 4% a year ago.
“While it is unlikely that the U.S. government would allow the sale of Chinese memory to the U.S., sales to data centers in other regions, such as Europe, could indirectly impact Micron,” Citi analysts said in an August note.
apple The company had begun testing CXMT’s DRAM chips for devices sold in China and was lobbying the U.S. government to allow widespread use of its products, the Financial Times reported in July, citing people familiar with the matter. Apple has been contacted for comment.
