China’s CXMT Secures $3 Billion DRAM Supply Deal with Tencent

Chinese memory chipmaker ChangXin Memory Technologies has signed a multi-year agreement to supply Tencent with server DRAM chips worth more than 20 billion yuan, or roughly $2.94 billion. The contract spans up to five years and arrives at a time when a prolonged global chip shortage has made long-term memory supply a strategic priority for cloud and AI workloads.

The deal is a significant endorsement for the Hefei-based firm, which has long trailed global leaders Samsung and SK Hynix in technology. CXMT is also in discussions with other large Chinese internet companies on similar supply arrangements, two additional sources said. Its IPO prospectus already lists Tencent, Alibaba Cloud, ByteDance, Lenovo, and Xiaomi as major customers.

CXMT received approval in May from the Shanghai Stock Exchange for an initial public offering on the STAR Market that aims to raise 29.5 billion yuan, putting it on course for one of mainland China's largest listings in years. The Tencent commitment reinforces the company's standing just as it prepares to sell shares to the public.

The broader memory market has swung sharply in CXMT's favour. DRAM contract prices surged roughly 95 percent quarter-on-quarter in the first quarter of 2026, according to UBS, and the bank expects the upcycle to last until at least late 2027. CXMT's first-quarter revenue hit 50.8 billion yuan, a 700 percent jump from a year earlier, while it recorded a net profit of 25 billion yuan after posting a loss in the same period last year.

The company is expanding aggressively to capture the wave. It is building a new DRAM fabrication plant in Shanghai that, together with existing capacity in Hefei and Beijing, will roughly double its monthly wafer output to around 600,000 wafers, three sources said. One source noted that CXMT is still grappling with low production yields on its next-generation DDR5 products, a reminder of the technology gap that persists even as the company scales.