Illustration of a semiconductor wafer.
[People News] On July 27, 2026, Changxin Technology (CXMT, formerly known as Changxin Storage) was officially listed on the Sci-Tech Innovation Board. The initial offering price was 8.66 yuan, and it skyrocketed over 470% at the opening, closing with an increase of approximately 465%. Its market capitalization briefly surpassed 3.3 trillion yuan, temporarily overtaking the Industrial and Commercial Bank of China to become the largest by total market value in A-shares. The trading volume exceeded 100 billion yuan, with a turnover rate exceeding 60%, while the circulating shares accounted for only about 6.73%. This excitement was characterized by domestic public opinion as a milestone event of "domestic storage breaking the blockade" and "national assets reaching the peak."
However, when we strip away the emotions and narratives, the story of Changxin appears more as a temporary reflection of China's semiconductor "national system" during specific cyclical windows, rather than a true global technological and commercial breakthrough. Its high valuation is heavily dependent on an extremely low circulating share, policy protection, the closed nature of the domestic market, and the upward cycle of storage. The market and independent analysis institutions generally hold a cautious or even pessimistic view on whether it can narrow the gap with Samsung, SK Hynix, and Micron in the long term, or even achieve surpassing.
Structural Factors Behind the Impressive Data
From a financial standpoint, Changxin's performance is indeed quite impressive. In the first quarter of 2026, its revenue was approximately 50.8 billion yuan, reflecting a year-on-year increase of over 700%. For the first half of the year, revenue is expected to reach between 110 and 120 billion yuan, with net profit estimated to be between 50 and 57 billion yuan. Its global DRAM market share stands at about 7-8%, ranking fourth.
However, when these figures are examined over a longer timeframe, they reveal different implications. In 2023, during a downturn in the storage industry, the company still reported losses exceeding 16 billion yuan. Conversely, the rapid growth anticipated in 2025-2026 is largely attributed to rising storage prices driven by AI demand, along with a temporary supply gap in the mid-range DRAM market following Samsung and SK Hynix's shift of production capacity to HBM.
Changxin has capitalized on this opportunity by securing long-term agreements with major clients such as ByteDance and Tencent, which have helped stabilize both shipments and prices. Some of its product prices are no longer significantly lower than those of international competitors, indicating a degree of improvement in its bargaining power.
Nevertheless, from a valuation standpoint, the challenges are equally clear. The extremely low circulation of shares means that only a small fraction of the company's stock is available for trading, allowing minimal capital to significantly inflate stock prices. The total market capitalization derived from this does not accurately reflect the company's true realizable value. In contrast, companies like Samsung, SK Hynix, and Micron generally maintain valuations within a more rational range.
Thus, the current high market capitalization reflects not only improvements in fundamentals but also additional premiums stemming from liquidity, market sentiment, and the narrative of 'domestic substitution'.
Technological Advancements and the Reality Gap
From a technological standpoint, Changxin Storage has indeed made strides. Its DDR5 products have reached mass production, with certain performance metrics nearing those of international manufacturers. By leveraging the Qimonda patent system and collaborating with domestic equipment suppliers, the company is gradually carving out its own technological path in the conventional DRAM sector.
However, some key gaps still remain.
The most significant shortcoming is in high bandwidth memory (HBM). The importance of HBM in the AI industry chain is rapidly increasing, yet Changxin (Cháng xīn) is still in a relatively early stage in this area, facing a generational gap of 2-4 compared to Samsung and SK Hynix (SK Hǎi lì xī). The target timeline for mass production and yield of HBM3 (with research models suggesting around 25%) has not yet reached commercially competitive levels. The funds raised in the IPO, as outlined in the prospectus, are primarily allocated for upgrading conventional DRAM production lines and R&D, rather than specifically targeting HBM.
On the manufacturing front, the absence of EUV lithography equipment also hinders the advancement of cutting-edge processes. While alternatives like multiple exposures can be employed, they come with increased cost and yield pressures. By 2025, China's overall localization rate for semiconductor equipment is projected to be around 21-25%, with etching and deposition showing faster progress at about 27-31%, but lithography remains below 5-10%, and high-end measurement capabilities are even weaker. Thus, domestic substitution is still in progress, and achieving full coverage will take time.
Moreover, past controversies regarding intellectual property have emerged, with South Korean prosecutors previously filing lawsuits against former Samsung employees and related Changxin personnel for trade secret violations; Micron also issued patent warnings in earlier years. While these issues did not directly result in losses at the corporate level, they underscore the gray areas in the technological landscape. The true foundation of originality and global customer trust will still require time to be validated.
In summary, although Changxin is a significant player in the global DRAM market, it still has a considerable distance to cover compared to technology leaders, particularly in next-generation key products.
Institutional Support and Development Path
Understanding Changxin's development path requires considering the institutional environment that underpins it. The company's shareholders include local state-owned enterprises and the National Big Fund, which provided significant funding, land, and policy support in its early stages, characterizing it as a typical 'national team' project.
The Changxin project was initiated in Hefei in 2016, with a total investment of around 18 billion yuan for its first phase. Hefei Industrial Investment contributed 14.4 billion yuan, representing 80% of the investment. This project features a highly complex multi-layered shareholding structure: state assets from the Hefei Economic Development Zone enter Qinghui Jidian through Xinrui Investment, while Hefei Industrial Investment enters through Changxin Integrated. Additionally, Changxin Integrated directly holds shares in Changxin Technology, with further configurations through platforms like Chanit Investment No. 1, Hefei Jianchang, and Chanit High Growth.
The local state-owned assets and national team model offer advantages such as resource concentration and rapid progress, particularly in a tightening external environment, allowing for the swift establishment of fundamental capabilities. However, this model also presents long-term challenges, including a high dependence of corporate profitability on economic cycles and policies; a relatively concentrated customer base with limited opportunities for international market expansion; and the potential risk of overcapacity during industry downturns.
In summary, while this development path is adept at addressing the question of 'whether or not' something can be achieved, it still requires more market-oriented mechanisms and a longer-term focus on technological accumulation to ensure sustained excellence.
Long-term prospects and uncertainties
The market remains generally cautious about Changxin's future development.
On one hand, the technical gap is challenging to fully close in the short term, particularly in the areas of HBM and advanced processes. On the other hand, global high-end customers prioritize long-term stability and ecological synergy, which cannot be rapidly established through policy alone.
Additionally, the storage industry is characterized by strong cyclical traits. The current high profits are largely due to a mismatch between supply and demand. Once global production capacity is released and prices decline, profitability will be tested. In such circumstances, high valuations are often more vulnerable to shocks.
International agency Morningstar is optimistic about Changxin's high profits over the past two years; however, it believes that the memory industry lacks an economic moat. Due to technological lag and equipment constraints, Changxin is unable to fully close the gap, and long-term prices are expected to fall. Research institutions such as SemiAnalysis, Counterpoint, and TechInsights assert that 'the issue lies in the future.' Current profits are primarily driven by the cycle rather than technological leadership.
This indicates a consensus on the risks surrounding Changxin's outlook: following the release of multiple factors such as the strong cycle in storage, U.S. export controls, geopolitical pressures, HBM yield and customer validation, and production capacity, a price decline is highly probable.
How to assess this IPO
In a sense, Changxin's IPO marks a significant milestone in the development of China's semiconductor industry. It illustrates that, with the support of policy and the resonance of industry cycles, local companies can achieve rapid scale expansion and performance improvement.
However, this event also highlights another dimension: the intricate interplay between valuation, market sentiment, and market structure, along with the long-term support from state-backed entities. In a context where the circulating supply is limited, prices can be easily inflated artificially, and such inflation lacks a solid long-term value foundation and the iterative support of technical fundamentals.
Thus, instead of merely labeling it a 'historic breakthrough,' it is more accurate to view it as a phased outcome: one that encompasses both genuine advancements and the bubble effects stemming from cyclical trends, national systems, and nationalist sentiments.
Looking ahead, the future trajectory of Changxin will depend on several fundamental factors—whether technology can continue to evolve, whether costs and yield can be consistently optimized, and whether it can build genuine competitiveness in a more open market.
(Originally published in People News) △
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