China’s CXMT begins producing advanced AI memory chips

ChangXin Memory Technologies, China's largest domestic DRAM manufacturer, has begun producing HBM3E memory chips in small quantities, according to a report by The Information published Monday. The milestone places the company just one generation behind the world's leading memory makers and marks a strategic advance in Beijing's push for semiconductor self-sufficiency amid U.S. export controls.theinformation

A Domestic AI Memory Supply Chain Takes Shape

HBM3E is an advanced type of high-bandwidth memory essential to AI chipsets, serving as the critical link between processors and the massive data flows required for training large models. According to Reuters, citing The Information's reporting, several Chinese chip designers — including Alibaba Group's ↗ 1.28% T-Head unit and Beijing-based Cambricon Technologies — are already testing CXMT's HBM3E silicon with their processors. These companies plan to integrate the memory into commercial products as early as next year, with CXMT targeting broader production expansion in 2027.reuters+1

The development is notable because high-bandwidth memory has been a bottleneck in global AI infrastructure. Until now, the HBM market has operated as a three-player oligopoly among SK Hynix ↗ 2.78%, Samsung Electronics, and Micron Technology ↗ 5.12%, all of which are already shipping HBM3E in volume or moving toward next-generation HBM4 architecture.cryptobriefing

Challenges Remain

Despite the technical progress, CXMT faces steep hurdles. The company's overall HBM technology is estimated to be three to five years behind dominant global rivals, according to The Information's report. Manufacturing yields remain low, and Western trade sanctions continue to block access to extreme ultraviolet lithography equipment made by ASML ↗ 5.02%, forcing CXMT to rely on older deep ultraviolet tools that limit chip density and power efficiency.investing+1

As Newsquawk noted, customer qualification — not initial production — historically marks commercial viability in semiconductors, and the gap between first output and meaningful market share tends to be long.newsquawk

IPO Windfall Funds the Push

The production milestone comes weeks after CXMT's landmark debut on the Shanghai STAR Market, where the company raised approximately $8.6 billion in what became one of China's largest IPOs. Shares surged roughly 470% on their first day of trading. For the first half of 2026, CXMT reported revenue of 150.3 billion yuan, a nearly tenfold increase year-over-year, with net profit of 77.6 billion yuan — a dramatic reversal from losses a year earlier. Those gains were driven largely by strong DRAM pricing and AI-related supply constraints rather than HBM revenue specifically.investing+1

Established in 2016 with local government backing, CXMT has grown into the world's fourth-largest standard DRAM manufacturer. Whether it can translate early-stage HBM3E production into a commercially viable fourth competitor in the high-bandwidth memory market will depend on closing the yield and technology gap — while navigating an export-control landscape designed to prevent exactly that outcome.