‘CXMT shock’: Can China’s memory-chip maker disrupt the three-player market?

China’s semiconductor threat has become harder to dismiss. ChangXin Memory Technologies, the country’s largest DRAM maker, made a successful debut on the Shanghai Stock Exchange’s STAR Market, with its share price rising as much as 476% above the offering price during trading. Its market capitalization climbed to 3.14 trillion yuan, reportedly overtaking Industrial and Commercial Bank of China.

The listing reflects a change in Beijing’s semiconductor strategy after the U.S.-China trade conflict. Earlier efforts concentrated state support on selected leaders in the hope of creating companies at the global frontier. After U.S. export controls cut parts of China off from the international supply chain, policy shifted toward reconnecting the ecosystem and developing leading companies through the market.

The shift followed painful failures. China’s large state-backed semiconductor funds provided about 25 trillion won in their first phase, launched in 2014, and about 38 trillion won in their second phase, created in 2019. Companies including SMIC, YMTC, CXMT and HiSilicon received support. But Wuhan Hongxin Semiconductor collapsed after announcing a roughly 20 trillion won project for 14-nanometer and 7-nanometer production. It later failed to pay 51 million yuan in construction costs, and investigators found that the plant could not proceed with further construction. At least $2.3 billion in government funds disappeared, according to the account.

Tsinghua Unigroup, once confident enough to pursue Micron, defaulted in 2020. A corruption investigation followed, leading to the arrest of China’s industry minister Xiao Yaqing and fund executive Ding Wenwu. Tsinghua Unigroup chairman Zhao Weiguo received a suspended death sentence for embezzlement and other offenses. China subsequently tightened limits on indiscriminate central subsidies and froze local-government support. The third state fund, established in 2024, focused on lithography equipment, advanced materials and high-bandwidth memory affected by export controls.

CXMT represents a different model, combining Western technology with long-term local-government investment. Founder Zhu Yiming studied physics at Tsinghua University, moved into electrical engineering while studying in the United States and later founded the Silicon Valley chip-design company GigaDevice. He worked with Hefei’s government to launch the “506 Project” in 2016, with the city providing 13.5 billion yuan, or about 75% of the initial capital.

Hefei’s approach uses local government as an anchor investor, absorbs early risk and attracts related suppliers to build a regional industrial cluster. CXMT also acquired patent technology from bankrupt German memory maker Qimonda rather than copying Micron technology, as rival Fujian Jinhua had done. After announcing mass production of DDR4 in 2019, CXMT expanded wafer-processing capacity from about 40,000 wafers a month in 2020 to 250,000 in 2025. Its global DRAM share rose from 3% in 2025 to 8% in 2026, intensifying pressure on the established market leaders.