Morgan Stanley warns China’s CXMT could surpass Micron in memory capacity by 2028

A Morgan Stanley ↘ 1.07% report circulating this week projects that ChangXin Memory Technologies, China's largest DRAM maker, will expand its monthly wafer capacity from 180,000 wafers in 2025 to 500,000 by 2028 — a pace that would potentially surpass Micron Technology ↘ 2.64% and reshape the global memory supply landscape.ad-hoc-news+1

The warning arrives at an awkward moment for Micron, which has staked its future on the premise that memory supply will remain tight through 2028, underpinning a $250 billion U.S. investment plan and capital expenditures projected to reach more than $45 billion in fiscal 2027.reuters+1

The Capacity Race

ChangXin, also known as CXMT, has already closed much of the gap with Micron. According to Citrini Research estimates published in July, CXMT was on track to end 2026 with roughly 350,000 wafer starts per month — just 25,000 fewer than Micron. The company plans to add 100,000 wafers per month of capacity in Shanghai in 2027 and another 100,000 in 2028, according to the Korea Times. Nomura Securities estimates that trajectory would bring CXMT to approximately 550,000 wafers per month by the end of 2028.tomshardware+2

CXMT's July IPO on the Shanghai Stock Exchange, which raised roughly 12.56 trillion won and saw shares surge 465 percent on debut, provided the financial firepower for such expansion. The South China Morning Post reported on August 27 that CXMT posted an 870 percent revenue surge and reiterated its target of reaching 500,000 wafers per month by 2028.koreatimes+2

A Technology Gap Persists

Despite the capacity surge, industry observers caution that raw wafer output does not equate to competitive parity. The technology gap between CXMT and established memory makers — Samsung Electronics, SK Hynix ↘ 2.31%, and Micron — remains an estimated three to four years, particularly in high-bandwidth memory, the product most critical to AI infrastructure.koreatimes

According to Counterpoint Research, SK Hynix led the HBM market with a 58 percent revenue share in the first quarter of 2026, followed by Samsung and Micron at 21 percent each. CXMT did not register in the HBM rankings. SemiAnalysis reported that CXMT is still struggling to stabilize production of 8-high HBM3, with yields below industry standards.koreatimes

Micron's Countervailing Bet

Micron CEO Sanjay Mehrotra said during the company's fiscal third-quarter earnings call in June that "even as we expect industry supply to improve gradually in 2028, we currently do not have line of sight as to when memory supply will be able to catch up with increasing demand". The company reported fiscal Q3 revenue of $41.46 billion, up 346 percent year over year.benzinga+3

Wall Street analysts maintain a broadly bullish outlook, with an average price target near $1,295 and 31 buy ratings. Goldman Sachs The Goldman Sachs Group, Inc. ↘ 2.28% has pointed to a structural DRAM deficit of 5.9 percent in 2027. But the Morgan Stanley projection on ChangXin's expansion introduces a variable that complicates the supply-scarcity thesis — one that investors pricing Micron at roughly six times expected earnings will need to weigh carefully.ad-hoc-news