#GoldmanSachsBullishOnCXMT

Goldman Sachs Bullish On CXMT: Why A China DRAM Maker Is Now On Global Radar

A new note from Goldman Sachs has shifted view on memory. The bank turned bullish on CXMT, China largest DRAM maker, and the call is not about short term price. It is about supply power.

For over a decade, DRAM was a three-player game. Samsung, SK Hynix, and Micron held over 94% of bit supply. That tight oligopoly kept price discipline. CXMT was seen as small, low yield, and stuck at 19nm and 17nm. Goldman says that view is now out of date.

What Changed For CXMT

Goldman points to three hard shifts in last 9 months.

First, yield lift at 16nm. CXMT 16nm DDR4 yield is now near 75% to 80%, up from 55% a year ago. Pilot DDR5 at 12nm class node shows early yield of 40% to 45%. That is still well below Samsung 1b-nm yield above 85%, but it is enough for China home demand. Chinese server and phone makers are under clear order to cut reliance on US-linked supply, so even 40% yield is sellable.

Second, capex surge despite export curb. CXMT capex for 2025 to 2026 is seen at $4.8 billion, funded by Hefei and Beijing backed fund. Monthly wafer capacity is seen rising from 170k per month in late 2024 to 280k per month by Q4 2026. At 280k, CXMT would hold 11% to 12% of global bit supply, up from 4.5% in 2022. In LPDDR5 for China phones, share is already near 28%.

Third, focus away from HBM. Market obsess over HBM3 and HBM3E, where SK Hynix holds over 53% and CXMT has zero share. Goldman argues that HBM is only 18% of bit demand but 42% of industry revenue. The other 82%, DDR4, DDR5, LPDDR5 for standard server and mobile, is where CXMT is gaining. With DDR5 spot price up 19% year to date on AI server build, a low-cost second source is what Alibaba, Tencent, and Baidu want.

Why Goldman Is Bullish Now

Goldman base case sees CXMT gross margin near 18% in 2026, up from 6% in 2023, on better yield and mix shift to DDR5. Revenue could hit $4.2 billion in 2026, up from $1.9 billion in 2023. At that level, IPO on STAR board in late 2026 at $22 billion value looks low versus 5.2x sales for Micron.

Goldman also notes cost edge. CXMT uses domestic DUV tools from Naura and AMEC, plus de-Americanized etch and deposition kit, which cuts capex per 10k wafer by 22% versus Korean peers. Labor and power cost in Hefei is also 35% below Korea.

What It Means For Global DRAM

Goldman trim of Micron target by 6% and hold of Neutral shows worry. Every 1% of global share gained by CXMT could drag commodity DDR4 and LPDDR4 ASP by 1.3% to 1.5%, per Goldman model. That caps upside for incumbents in low-end segment.

Two pools are forming. High-end HBM pool stays under Korea and US control, with tight IP and EUV need. Mid-range DDR5 and LPDDR5 pool in China is now led by CXMT, with protected demand, state fund, and price set that undercuts Korea by 12% to 15%.

If CXMT hits 300k wafer per month by 2027 and DDR5 yield crosses 65%, DRAM moves from three-player to four-player market for first time since Elpida exit in 2012. That ends era of perfect pricing power.

For investors, bullish call on CXMT is less about buying a private China firm and more about re-rating risk for all memory names. With US federal debt above $40 trillion, gold above $2,650, and BTC above $81k, market is paying for scarce hard asset, but also for supply chain that can still grow when others are capped. CXMT fits that second theme, and that is why Goldman is now bullish.