Goldman Sachs Holds Emergency Meeting Ahead of CXMT IPO! Bullish on China's DRAM Expansion and Domestic Semiconductor Equipment as New Investment Theme

As Chinese memory giant CXMT (688825-CN) officially enters the capital market, Goldman Sachs has unusually convened an emergency expert meeting on China's memory industry just before its IPO. Besides being bullish on China's DRAM capacity expansion over the next few years, Goldman also believes that domestic semiconductor equipment localization has become the most certain investment theme. Although HBM technology still lags behind international giants, strong and sustained AI demand is expected to support memory prices and drive long-term growth in China's semiconductor supply chain.

Three days before CXMT's listing (on the 24th), Goldman Sachs urgently convened a specialist phone conference focused on China's memory industry. The meeting invited a senior industry expert who previously served as a high-level marketing executive at CXMT Storage and spent 18 years at Samsung Electronics, to conduct an in-depth analysis on three key aspects: the pace of China's DRAM capacity expansion, product technology progress, and global memory price trends.

Although CXMT currently cannot mass-produce high-bandwidth memory (HBM) required for AI servers, it has benefited from international giants like Samsung and SK Hynix (SKHY-US) prioritizing wafer capacity for higher-margin HBM products. This shift has driven a surge in prices for consumer and general-purpose DRAM, resulting in substantial profits for CXMT this year.

According to data provided by Goldman Sachs, CXMT's global DRAM revenue market share rose to 8% in Q1 of this year, with quarterly revenue increasing by a staggering 719% year-on-year.

The market expects that funds raised through this IPO will not only allow CXMT to further expand its DRAM capacity but also advance into cutting-edge technology areas such as HBM.

Industry experts are optimistic about the expansion prospects of China's domestic DRAM suppliers, forecasting that by 2030, the annual production capacity of China's leading memory manufacturers will more than double from current levels.

CXMT's capacity footprint already spans three major production bases in Hefei, Shanghai, and Beijing, all expected to be fully operational before 2028. Additionally, an even larger production base will begin contributing capacity after 2028, continuously boosting the overall supply of domestically produced DRAM in China.

Notably, while this new capacity continues to purchase equipment from top international vendors, it is also accelerating the adoption of domestically made Chinese semiconductor equipment. In some facilities, apart from lithography tools that still rely on imports, Chinese-made equipment is now widely used across other manufacturing processes, opening unprecedented penetration opportunities for local equipment suppliers.

As a result, Goldman Sachs presented a core judgment during the meeting: the trend of China's memory capacity expansion is now irreversible, and equipment localization will be the most certain investment theme.

In other words, regardless of the pace of actual capacity expansion by players like CXMT, domestic Chinese semiconductor equipment suppliers such as NAURA (002371-CN), Advanced Micro-Fabrication Equipment (688012-CN), and ACM Research (688082-CN) will be direct beneficiaries. As capacity continues to expand, both equipment orders and localization ratios will rise—a logic independent of any single customer's success or failure.

On the product technology front, experts noted that China's leading domestic DRAM manufacturers are continuously updating their processes, with product performance showing clear improvements compared to last year. However, compared to international leaders like Samsung and SK Hynix, key metrics such as read/write speed still lag behind.

Experts further revealed three key technology timelines:

First, mass production of HBM3 and HBM3E is a clear target set by China's leading domestic manufacturers to be achieved by 2026.

Second, due to export controls on extreme ultraviolet (EUV) lithography equipment, Chinese manufacturers must rely on deep ultraviolet (DUV) tools combined with other innovative process routes to develop high-end products.

Third, 3D DRAM technology is expected to achieve a new round of R&D breakthroughs by 2027, potentially serving as a viable solution to bypass EUV restrictions.

Regarding price trends, experts analyzed that although yields remain relatively low, Chinese domestic DRAM pricing has gradually approached the levels of international first-tier manufacturers.

Looking ahead, price increases for DRAM are expected to moderate in the third and fourth quarters due to smartphone brands resisting rising costs. However, strong AI demand in both Chinese and overseas markets is expected to support memory prices continuing to rise through 2027.

Additionally, experts believe that global leading memory manufacturers will not shift HBM capacity back to traditional DRAM production in the short term. The strength of AI demand will continue to limit HBM supply flexibility. At the same time, the proportion of long-term contracts between memory manufacturers and customers is expected to rise further, helping to stabilize price floors.

In the eyes of market institutions, CXMT Storage's listing is not just a simple IPO, but a significant milestone symbolizing China's semiconductor 'self-reliance and control' strategy moving from conceptual advocacy to commercial practice.

As China's domestic memory and advanced logic chip suppliers gradually meet the massive demand from Chinese cloud service providers (CSPs) in the generative AI field, the entire 'China-for-China' semiconductor supply chain—including foundry, semiconductor equipment, materials, components, intellectual property, and IC design—stands to benefit significantly.