CXMT Weighs Second Beijing Fab After $8.6 Bn IPO

China’s CXMT is considering building a second memory-chip plant in Beijing and is in financing talks with a local government-backed technology manufacturing hub, Reuters reported, citing two people familiar with the plans.

The proposed 12-inch wafer fabrication plant would be built in Yizhuang, about 20 km southeast of central Beijing, where CXMT already operates a facility producing dynamic random-access memory, or DRAM, chips.

CXMT is seeking at least CNY60 Mn, or about $8.9 Mn, in support from the Beijing Economic-Technological Development Area, according to the report. Other state-owned technology companies have also expressed interest in participation.

The discussions are at an early stage, and the eventual size and structure of any funding package could change. It remains unclear whether the support would come directly from the development zone’s administrative authority or through its investment vehicles.

CXMT and the Beijing municipal government did not respond to Reuters’ requests for comment. The planned capacity and total investment for the proposed plant have not been disclosed. However, a facility capable of producing leading-edge DRAM chips typically costs more than $10 Bn.

The talks began before CXMT’s record Shanghai IPO last week, when the company raised CNY57.92 Bn, or about $8.6 Bn, at an IPO valuation of roughly $85.5 Bn. Its shares rose more than 500% intraday on their July 27 debut, briefly lifting its market capitalisation to about $539 Bn, before closing 466% above the offer price. The stock has gained a further 13% since then.

The listing gave CXMT fresh capital for an expansion drive during a memory-chip upcycle fuelled by demand from AI infrastructure, data centres and consumer electronics.

Reuters previously reported that CXMT was building new plants in Shanghai and Hefei and had held discussions with authorities elsewhere about another facility. The expansion could more than double its monthly production capacity to 600,000+ wafers when fully operational.

CXMT currently operates two 12-inch DRAM fabs in Hefei and one in Beijing, each with capacity of about 100,000 wafers a month, according to people familiar with its operations.

The company is the world’s fourth-largest DRAM producer but remains considerably smaller than Samsung Electronics, SK Hynix and Micron Technology. Together, the three global leaders controlled close to 90% of the market in the first quarter, according to Counterpoint Research.

CXMT has become a key part of Beijing’s effort to build a self-sufficient semiconductor industry and narrow the technology gap with the US as restrictions limit China’s access to advanced chips and manufacturing equipment.

Within China, CXMT’s growing dominance has allowed it to raise prices for customers, including Huawei, Reuters reported last month.

The company’s rise has been closely linked to the Hefei model, under which the capital of Anhui province used state funding to develop strategic technology firms. Beijing and Shanghai have also provided financing and other support as the cities compete for a larger share of the economic and strategic benefits generated by CXMT’s growth.

CXMT’s existing Beijing fab, operated by Changxin Jidian, was established in 2020 with funding from E-Town Capital, a state-backed investment arm linked to the Yizhuang development zone, and its affiliate Beijing E-Town Technology. Yizhuang is also home to operations belonging to contract chipmaker SMIC, semiconductor-equipment producer Naura Technology and smartphone and electric-vehicle maker Xiaomi.