Domestic memory leader CXMT passes IPO review, storage industry valuation logic shifts

Background

Longsys (CXMT), recognized as one of China's two leading domestic memory "twin stars," passed the IPO review for listing on the Shanghai STAR Market. The company's planned fundraising of 29.5 billion yuan marks the largest proposed IPO amount for the STAR Market to date. A recent on-site visit by Securities Times reporters to CXMT's Hefei facilities revealed active construction and a dense clustering of semiconductor supply chain companies nearby, indicating rapid expansion and ecosystem development.

Key Points

The core point is a paradoxical market shift within the memory "super cycle." While overall demand is high, internal profit margins are showing an unexpected inversion:

• Profitability Flip: The article highlights that generic DDR products are now achieving higher profit margins than the high-end HBM (High Bandwidth Memory) class. This is a counter-intuitive development, as HBM is typically associated with advanced, high-value applications in AI.
• Industry Leader's Response: This market reality has forced a strategic adjustment at major players. U.S. memory giant Micron has restarted production of the older DDR4 specification, directly responding to the superior profit margins available in mainstream, standardized memory.
• AI as the Catalyst: The underlying driver is the AI boom. Memory is now viewed as a critical infrastructure for AI computing power, shifting its perceived value and utility.
• Valuation Logic Overhaul: Consequently, foreign investment institutions are re-valuing international memory giants using growth stock metrics instead of traditional cyclical stock metrics. This represents a fundamental change in how the industry's long-term earnings potential is being calculated.

Significance

The confluence of CXMT's historic IPO and the memory market's internal dynamics points to two major themes.

• For China's Semiconductor Ambition: CXMT's successful IPO and expansion underscore a concerted national push to build a robust, self-sufficient domestic memory supply chain, reducing reliance on foreign firms.
• For the Global Memory Industry: The profit margin inversion and valuation shift signal a structural realignment. The value chain is being reshaped by AI's infrastructure demands, making standard memory a critical, high-margin product and challenging the old hierarchy where advanced node processes automatically commanded the highest profits. Micron's production pivot validates this trend. This environment may benefit companies with strong capacities in mainstream DRAM production, like CXMT, while pressuring others to recalibrate their product mixes and investment strategies.