ChangXin Memory Technologies (CXMT) is planning to break into the US memory market. According to sources close to the matter, branching out overseas is part of a longer-term plan for the Chinese firm that has swiftly become the fourth-biggest maker of memory in the world.
CXMT has been on my radar lately as multiple motherboard and PC component makers have made moves to validate its memory for their products. Considering the news that CXMT is reportedly massively ramping up its DRAM capacity during these times of memory shortage, it’s not hard to see why.
However, we’re still a ways off from seeing CXMT DRAM become more readily available in the US; in the nearer term, CXMT will have to navigate both intense domestic demand in China, as well as Western competitor Micron urging US lawmakers to curb the company’s access to key equipment, plus a sword of Damocles in the form of a spot on the Commerce Department’s trade blacklist (via Reuters).
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Not even Apple has been safe from the effects of the memory crisis, and has been keen to seek assurances CXMT won’t be placed on the US’ “Entity List”. Even with such a powerful supporter looking to buy its wares, what remains is still a challenging geopolitical obstacle course for CXMT to navigate.
Still, CXMT may have sufficient weight behind it to bulldoze through. For one thing, the firm saw $7.5 billion in revenue in Q1, which both represented a 719% year-on-year increase and erased six months of losses. The company also enjoyed Asia’s largest IPO of the year, raising $8.6 billion. It’s also obviously worth noting that CXMT is also supported by the state-backed semiconductor investment vehicle often simply referred to as the ‘Big Fund’.
Money talks, but here’s an illustrative example: Huawei, arguably the major player in Chinese big tech, has reportedly been demanding relief from CXMT over escalating costs. CXMT has chosen not to relent, with the situation finally coming to a head on one of its factory floors in June. Sources say a number of engineers were carrying out equipment maintenance when CXMT ordered them to leave its factory. Why? Because the engineers hailed from a vendor with extremely close ties to Huawei.
Though the company continues to work with Huawei, the engineers have not been allowed back. Huawei also remains without recourse to challenge CXMT’s prices, just going to show how much power the memory manufacturer wields at home. Though seemingly unstoppable in China, whether CXMT will ever realise its Stateside ambitions remains to be seen.
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