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China's CXMT said on Friday it made a 54 billion yuan (US$8.11 billion) profit in the third quarter, its first results since its mammoth IPO in July, as surging AI-driven demand drove prices higher for its memory chips.
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ChangXin Memory Technologies became China's most valuable listed company after its shares surged by more than five times in their Shanghai debut in July following its 58 billion yuan (US$8.71 billion) IPO, Asia's biggest this year.
On Friday, it reported a net profit attributable to shareholders of 54.4 billion yuan for the three months ended September 30. Its gross margin, a measure of profit after production costs, rose 1.94 percentage points from the second quarter to 89.53 percent, helped by higher prices and sales volumes as well as lower per-chip costs.
CXMT, China's largest DRAM supplier by revenue, has benefited as rivals SK Hynix Samsung Electronics and Micron Technology have increasingly prioritised higher-value products such as high-bandwidth memory, or HBM.
DRAM is a type of short-term memory used in computers and data centres, while HBM is a higher-performance version used with AI processors.
Sources said this week that CXMT plans to begin limited production of HBM3E chips within two months, despite manufacturing yields of only 20 percent to 30 percent, compared with around 70 percent at South Korea's SK Hynix.
CXMT reported revenue for July-September of 118.71 billion yuan, up 613.2 percent from a year earlier and 19.3 percent from the previous quarter.
CASH PILE FUNDS EXPANSION PUSH
For the first nine months of 2026, CXMT's revenue rose 738.5 percent to 269.02 billion yuan, while profit attributable to shareholders was 132.04 billion yuan, compared with a loss of 5.28 billion yuan a year earlier. Operating cash flow surged 1,864.5 percent to 254.75 billion yuan.
CXMT spent 11.07 billion yuan on research and development in the first nine months, up 73 percent from a year earlier. It said samples of DRAM products developed using its sixth-generation manufacturing technology had completed validation, an important step toward commercial production.
The company held 285.16 billion yuan in cash as of September 30, compared with 51.99 billion yuan at the end of 2025. CXMT has been building chip factories in Beijing, Shanghai and Hefei that could eventually double its monthly capacity to about 600,000 12-inch wafers, Reuters has reported. It is also preparing to enter the NAND flash-memory market.
CXMT's shares closed down 2.5 percent on Friday before the results. The stock has fallen 32 percent from an August peak as investors fret about the sustainability of the AI investment boom.
Reuters
