CXMT beats SK hynix and Micron in DRAM margin at 87.59% gross rate

ChangXin Memory Technologies posted an 87.59% gross margin in the second quarter, topping global rivals SK hynix and Micron Technology, according to financial data compiled Sept. 10.

The Chinese memory maker surpassed Micron's non-GAAP gross margin of 84.9% and SK hynix's 83.2%. The result established CXMT as the highest-margin memory producer in the global market.

CXMT generated 150.31 billion yuan ($21.2 billion) in first-half revenue, rising 873.64% from a year earlier. Second-quarter net profit reached 52.84 billion yuan ($7.45 billion), up 113% sequentially.

First-half net profit totaled 77.61 billion yuan ($10.95 billion). That marked an operational reversal from a net loss of 2.33 billion yuan recorded during the same six months of 2025.

The company's second-quarter net margin settled at 74.91%, while its first-half gross margin reached 84.84%. Low operating expenses and strong domestic contract pricing drove the margin expansion, corporate filings showed.

A massive state-backed equity sale provided the balance-sheet foundation for the capacity ramp. CXMT raised 57.9 billion yuan ($8.17 billion) by listing on the Shanghai STAR Market on July 27.

The production surge expanded CXMT's presence across international channels. The company secured a 9.5% to 10% share of global DRAM revenue in the second quarter, up from 4% a year earlier.

Samsung Electronics retained the top industry position with a 38% to 39.4% revenue share. SK hynix took second place at 24.9%, while Micron held between 23.3% and 24%.

The three incumbent producers prioritized production lines for high-bandwidth memory, known as HBM, to supply artificial intelligence processors. SK hynix allocated most of its new cleanroom space to HBM3E packaging.

That shift constrained industry wafer capacity for conventional double data rate memory. As legacy supply tightened, global contract prices for DDR4, standard DDR5 and low-power DRAM jumped across Asia.

CXMT directed its expanding output into those vacated commodity tiers. State directives instructed Chinese device makers to prioritize domestic memory suppliers, guaranteeing immediate customer uptake for CXMT's expanding volume.

The company expanded into premium mobile memory alongside standard computer modules. CXMT announced Sept. 7 that it had started mass production of 16-gigabyte LPDDR6 memory operating at 12,800 megabits per second.

The initial production run of LPDDR6 will supply Xiaomi's 18 Fold smartphone, CXMT said. The contract marks the company's first integration into a flagship consumer mobile device.

Server memory also generated higher sales volume during the quarter. CXMT's server DRAM revenue exceeded its mobile DRAM receipts for the first time, market research firm TrendForce said.

Chinese internet giants moved procurement away from overseas vendors. ByteDance signed a five-year memory purchase agreement valued at more than $7 billion with CXMT earlier this summer, according to industry records.

Domestic clients paid contract prices equal to or above overseas spot benchmarks. State purchasing preferences allowed CXMT to capture elevated margins without offering discounts to secure long-term purchase commitments.

Subsidized municipal utilities and domestic capital equipment depreciation also suppressed operating costs. Hefei municipal entities provided local utility subsidies that lowered monthly operational expenses for CXMT's fabrication cleanrooms.

CXMT currently runs monthly production volume near 300,000 twelve-inch wafer starts. Industry estimates project that CXMT will expand that manufacturing footprint between 500,000 and 600,000 monthly wafer starts by late 2028.

Kiwoom Securities projected CXMT's 2026 DRAM bit shipment growth at 48%. That projection exceeds expected growth rates of 24% at Samsung, 27% at Micron and 30% at SK hynix.

The Chinese memory maker relies on deep ultraviolet immersion lithography and complex multi-patterning techniques. United States export controls prevent CXMT from acquiring advanced extreme ultraviolet scanners from ASML.

Those multi-patterning methods raise manufacturing complexity but permit volume fabrication of 16-gigabit DDR5 dies. CXMT engineers achieved commercial yields on sub-20-nanometer nodes without advanced Western tooling, according to industry disclosures.

CXMT's rapid growth exerts commercial pressure on Micron and SK hynix. Both foreign producers rely on commodity DRAM cash flow to fund heavy capital expenditure on next-generation memory architectures.

A sustained influx of Chinese memory chips risks eroding commodity memory pricing in regional markets. Investors expect legacy DRAM average selling prices to face downward pressure as Chinese fabs add capacity.

The company's interim filing does not state the itemized value of state subsidies credited to operating profit. The document also does not break out quarterly operating profit from gross figures.

CXMT General Manager Zhao Lun told investors Sept. 7 that the company is seeking additional international clients. Zhao said its memory lines match international suppliers in defect density and delivery stability.

Share trading rules will bring the company's capital base into open markets next year. Equity lockup agreements covering institutional shares issued during CXMT's July STAR Market debut expire Jan. 27, 2027.

CXMT is currently completing customer qualification testing for its second-generation DDR5 server memory. Commercial deliveries to domestic data center operators will begin in the fourth quarter, according to company schedules.