As AI-driven memory demand pushes DDR5 server memory prices ever higher, many procurement managers likely assumed that "switching to a Chinese manufacturer would be cheaper." But according to a Reuters report from July 24, 2026, that assumption has already collapsed. China's DRAM giant CXMT (ChangXin Memory Technologies) has, in recent weeks, set prices above Samsung's 64GB DDR5 server memory (roughly $1,240 per unit)—and refused to budge even when Huawei demanded a discount. Why has a manufacturer once seen as the "cheap alternative" turned into a leader in supply-side pricing? Behind this lies a structural shift in the industry itself: the move of production toward AI-oriented HBM (High Bandwidth Memory) is squeezing the supply of general-purpose DRAM.
CXMT Priced Above Samsung and Held Firm Even Against Huawei
According to the Reuters report of July 24, 2026, CXMT set prices for comparable DDR5 server memory modules above Samsung's 64GB product (roughly $1,240 per unit) in recent weeks. This was reported based on multiple sources familiar with the matter, and Reuters' article did not disclose CXMT's exact pricing levels. A manufacturer once known for its low prices is now becoming opaque about its specific pricing to outside observers.
Huawei, a leading Chinese tech company that has continued developing its own chips even under U.S. sanctions, has long been viewed as having strong bargaining power over domestic suppliers. Yet this time, even when Huawei demanded a discount, CXMT did not comply.
Still, the business relationship between the two companies reportedly continues. Despite both being Chinese firms, CXMT maintained its stance of refusing to grant special treatment. This episode shows that when demand outstrips supply, even dynamics based on company size or brand power no longer apply.
Under the old CXMT, even if it raised prices citing supply shortages, it would have had little room to refuse a discount request from a powerful domestic customer. Yet the fact that the business relationship between the two companies hasn't been severed also reflects how limited alternative suppliers are. The power balance between the two largest domestic players has already reversed with this incident.
Furthermore, it was reported that in June 2026, CXMT ordered engineers from a Huawei-affiliated equipment vendor, who had been working in the cleanroom at its Hefei R&D facility, to immediately pack up their tools and leave. The timing of holding firm on pricing with a business partner and forcibly expelling related personnel nearly coincided. This positions the incident as a case where CXMT demonstrated its shift in bargaining power through action.
The Mechanism by Which HBM Is Swallowing General-Purpose DRAM
Behind CXMT's newfound confidence lies a shift in production strategy among the three major manufacturers—Samsung, SK hynix, and Micron. In response to surging demand for HBM, which is directly tied to AI-oriented GPUs, all three companies are prioritizing HBM in their production capacity allocation. HBM and general-purpose DRAM like DDR5 compete for the same front-end silicon wafer production capacity. If a manufacturer increases wafer input for HBM, the production allotment available for general-purpose DRAM shrinks accordingly.
Moreover, HBM requires specialized back-end processes—such as TSV (through-silicon via), stacking, and silicon interposers—before becoming a finished product, meaning the number of finished units obtained from the same number of wafers tends to be lower than for general-purpose DRAM. The more the three major manufacturers pivot toward HBM, the more the supply capacity for general-purpose DRAM used in servers and PCs diminishes.
Converting existing general-purpose DRAM production equipment for HBM requires time for process redesign and yield improvement. As a result, the three major manufacturers cannot quickly shift production capacity once allocated to HBM back to general-purpose DRAM in the short term. This asymmetry has entrenched the supply shortage of general-purpose DRAM not as a temporary phenomenon but as a lasting structural feature.
This structural shift is also reflected in pricing. According to TrendForce data, DRAM industry revenue in Q1 2026 reached $97 billion, up 81% quarter-over-quarter, while contract prices for conventional DRAM itself rose 93–98% during the same period. The prioritization of server-oriented products has driven up prices across all product categories.
According to data from market research firm Omdia, CXMT's global DRAM market share expanded from about 3% in 2025 to about 8%, rising to fourth place globally and first place domestically in China. During the same period, the other companies' shares stood at roughly 38% for Samsung, roughly 29% for SK hynix, and roughly 22–25% for Micron; while CXMT still trails behind, it can be said to be the company that has most rapidly capitalized on the benefits of the supply shortage. No company among the three major manufacturers has more than doubled its market share in under a year.
The Scale of the Offensive Revealed by the IPO and Production-Doubling Plan
CXMT will list on the Shanghai Stock Exchange's STAR Market (Sci-Tech Innovation Board) on July 27, 2026. The offering price was set at 8.66 yuan per share, with total proceeds finalized at approximately 57.9 billion yuan (roughly $8.5 billion)—nearly double the initial target of 29.5 billion yuan stated in the preliminary prospectus. Bloomberg, reporting on the pricing decision on July 14, cited a fundraising figure of up to $9.8 billion, but this represents the upper limit assuming full exercise of the over-allotment option; the total proceeds from the base offering have been finalized at 57.9 billion yuan (roughly $8.5 billion). Reports indicate that CXMT's market capitalization after listing is expected to reach approximately $85.2 billion.
The 57.9 billion yuan raised exceeds the 53.23 billion yuan raised by Semiconductor Manufacturing International Corporation (SMIC) when it listed in Shanghai in 2020. The difference amounts to roughly 4.67 billion yuan, or an increase of nearly 10%. This makes it the largest fundraising amount ever for an A-share listing by a Chinese semiconductor company. While SMIC has still not achieved full domestic self-sufficiency under U.S. export controls since then, it has a track record of steadily expanding its share within China. If CXMT follows a similar trajectory, this IPO will become another example of a Chinese semiconductor company continuing to expand under regulatory pressure by leveraging financial strength.
The raised funds will primarily be used to expand production capacity. CXMT is currently building two new plants in Shanghai and Hefei, with discussions underway for a third site. Once all are completed, monthly production capacity is expected to exceed 600,000 wafers—more than double the current level. Although CXMT is the leading DRAM manufacturer domestically in China, its current production scale reportedly still falls short of the three major global manufacturers, revealing a picture in which CXMT is moving to seize control of the supply chain while still lagging behind in scale.
Revenue for Q1 2026 reached $7.5 billion, marking explosive growth of 719% year-over-year. The fact that such a dramatic revenue increase was achieved even while production capacity still lags behind the three major manufacturers confirms that both rising prices and expanding shipment volumes are working in tandem. Both capital and demand are fueling the production expansion.
Price Pass-Through That Divides Winners and Losers, Rippling into Japan's Procurement Costs
The biggest winner is CXMT itself. While maintaining pricing above Samsung's level, it has secured both the financial strength gained from its IPO and a plan to more than double its production capacity. For domestic AI and tech companies in China, having a domestic partner that can secure priority access to DRAM in a tight market carries significant weight. As this series of facts demonstrates, the shift in pricing power is clearly dividing winners from losers.
On the other hand, Huawei is on the losing end. Even though its discount request was rejected, the business relationship itself has not been terminated—a fact that, combined with the incident in which Huawei-affiliated engineers were ordered to leave the Hefei facility, confirms that Huawei has not secured an alternative supplier. Unable to extract concessions in price negotiations with CXMT, Huawei has no choice but to let the rise in DRAM prices feed directly into its own product costs. Even among Chinese companies, the era in which being a fellow domestic firm guaranteed special treatment in supply priority has already ended.
CXMT is designated by the U.S. Department of Defense as a "Chinese military-affiliated company" under Section 1260H, but it is not included on the Commerce Department's Entity List of export-restricted entities, meaning Apple can currently legally procure CXMT-made DRAM. Even so, while proceeding with testing and certification of CXMT DRAM for its own products, Apple is reportedly seeking a political assurance from the U.S. administration that CXMT will not be added to the Entity List in the future. According to a Fortune report, Apple reflected part of the rise in memory costs in its own product pricing as of June 2026. Apple's position has become even more complicated, as it deepens its reliance on a supplier that could become subject to sanctions while also facing surging prices.
This price pass-through also affects readers in Japan. Samsung's 64GB DDR5 server memory unit price of $1,240, converted at the late July 2026 yen-dollar exchange rate (approximately ¥162–163 to the dollar, for reference), amounts to roughly ¥201,000–202,000. Since a single server is equipped with multiple DRAM modules, the impact on procurement costs tends to compound beyond the price of individual components. The unit prices of DRAM procured by Japanese PC makers and server vendors are also under upward pressure from the same supply-demand dynamics.
Reuters reports that opinions are divided within the U.S. administration over whether to tighten export restrictions on Chinese memory manufacturers, including CXMT. Tightening restrictions would make procurement even harder for U.S. companies like Apple, while forgoing them would only deepen reliance on a supplier that could become subject to sanctions—a dilemma that looms over the situation. The outcome of this tug-of-war ultimately comes down to the U.S. administration's decision on whether to add CXMT to the Entity List in the future.
If the addition is forgone, CXMT will secure not only domestic customers but also major overseas clients like Apple, gaining a position of pricing power that extends beyond national borders. If it is added, CXMT's offensive will, for the time being, remain confined to dealing with domestic companies like Huawei that have no alternative options. Its target of over 600,000 wafers in monthly production capacity and the financial strength gained from its IPO have already solidified as a foundation that will not be relinquished regardless of which outcome unfolds.