In mid-July 2026, when CXMT confirmed its listing date, Micron fell 8% and lost its one trillion dollar market capitalization, and Samsung Electronics and SK hynix sold off alongside it.
I again read CXMT. In my view, this company has little organic technological depth. All its tech about DRAM is borrowed via collaboration in 2019 from a bankrupt german comapny. its DRAM yield is abt 25% through DUV litho yet it has a valuation of 600bn usd with revenue of around 16 bn USD. Its main customers are all chinese. Its main promoters is Hefei County ( capital of Anhui province) municipality govt. Who is propping it up then. it has no HBM revenue except as a prop. Chinese companies needs to be studied from two differing perspective. Tech and Governance. Governance decides what kind of tech expertise will come in. their tech expertise is all local and not top notch as is with leading three musketeers.
One mistake most people do while analysing Chinese market or chinese stocks, is ignoring the role of Communist party of China/Govt. They have their party cadres at every level in every company and for them profitability is not the first benchmark but the goals of Communist party. Semiconductors are a strategic sector for them and capturing maximum share is the chinese strategic objective with achieving monopoly in the long run. As long as chinese have money, they have no issue in subsidizing any sector they consider a strategic sector for as long as required.
The main fear is stuff like this....that China just once again becomes reckless with their investments. I was on that GS expert call (ex CXMT ex Samsung). doubling of capacity by running 3x fabs in Shanghai, 1x Beijing, and 1x Hefei by 2030. There is a plan to do a "mega fab" in Hefei, not in the doubling projections (so could be larger). This article's SECOND beijing plant would be even a surprise to the street and to this expert.
I again read CXMT. In my view, this company has little organic technological depth. All its tech about DRAM is borrowed via collaboration in 2019 from a bankrupt german comapny. its DRAM yield is abt 25% through DUV litho yet it has a valuation of 600bn usd with revenue of around 16 bn USD. Its main customers are all chinese. Its main promoters is Hefei County ( capital of Anhui province) municipality govt. Who is propping it up then. it has no HBM revenue except as a prop. Chinese companies needs to be studied from two differing perspective. Tech and Governance. Governance decides what kind of tech expertise will come in. their tech expertise is all local and not top notch as is with leading three musketeers.
Excellent. Got to understand CXMT more closely and shorted it. Technological gap is the key.
One mistake most people do while analysing Chinese market or chinese stocks, is ignoring the role of Communist party of China/Govt. They have their party cadres at every level in every company and for them profitability is not the first benchmark but the goals of Communist party. Semiconductors are a strategic sector for them and capturing maximum share is the chinese strategic objective with achieving monopoly in the long run. As long as chinese have money, they have no issue in subsidizing any sector they consider a strategic sector for as long as required.
https://www.streetinsider.com/Reuters/Exclusive-CXMT+plans+second+chip+plant+in+Beijing+and+is+in+talks+on+its+funding%2C+sources+say/26852496.html
The main fear is stuff like this....that China just once again becomes reckless with their investments. I was on that GS expert call (ex CXMT ex Samsung). doubling of capacity by running 3x fabs in Shanghai, 1x Beijing, and 1x Hefei by 2030. There is a plan to do a "mega fab" in Hefei, not in the doubling projections (so could be larger). This article's SECOND beijing plant would be even a surprise to the street and to this expert.