Forget SpaceX: This Chinese chip stock is going to the moon.
ChangXin Memory Technologies, or CXMT, recently went public on the Shanghai Stock Exchange’s tech-focused STAR Market (a China-based equivalent to the Nasdaq exchange), and has quickly shot up the charts.
On its initial day of trading, it shot up almost 466%, becoming the most valuable company on the exchange, and accrued a market capitalization of around $487 billion.
Despite many people only now learning its name, CXMT was founded a decade ago, in 2016, and has grown from a startup into a budding global player in the microchip industry.
AI-driven demand for memory chips
CXMT’s growth in the more immediate term is likely associated with the huge demand for chips and memory related to the proliferation of AI—and additionally, as China looks to create and foster more domestic chipmakers.
That’s in part because the U.S. federal government has instituted export controls and rules concerning semiconductors and similar technology being sold or otherwise sent to China.
Currently, large-scale AI data center infrastructure buildouts are fueling most of the demand, and with it, demand for dynamic random access memory chips (or “DRAM”) is up.
Prices are likewise up, and that’s spilled over into the market, with investors gobbling up chipmaker stocks and sending some companies to valuations of more than $1 trillion.
Committing to memory
That includes American memory chip company Micron Technology (Nasdaq: MU). While its shares have been volatile recently, the stock is up more than 727% over the last 12 months.
CXMT’s post-IPO rise puts it in the conversation, but it’s still much smaller than other large chipmakers, such as South Korea’s Samsung Electronics and SK Hynix, the latter of which went public in the United States earlier this month.
CXMT’s prospectus states that the company holds approximately 8% of the global market share in the chipmaking space, with Samsung accounting for 36%, SK Hynix at 29%, and Micron at 24%.
Notably, CXMT’s share has grown around 3% over the past year, so the company is making more than just waves in the stock market.
Even so, the company’s huge surge in the markets doesn’t mean it’s in the same strata as those competitors, experts say.
“It’s going to be a steep hill to climb for CXMT in the high-bandwidth memory market,” said Neil Shah, vice president of research for Counterpoint Research.