A clearer view of what matters

As demand for AI semiconductors shakes up the memory market, China’s largest DRAM maker, ChangXin Memory Technologies (CXMT), is forecasting a sharp improvement in performance. Along with the outlook for a surge in revenue, the company has also unveiled a share buyback plan, drawing attention to the growth momentum and stock price trends of Chinese memory chip makers.

Q3 revenue forecast: up to 619% higher than a year earlier

According to a report by Newsis, CXMT expects third-quarter revenue to come in between 114.7 billion and 119.7 billion yuan. That would represent an increase of 589% to 619% from the same period last year. Net profit is estimated at 53.395 billion to 54.895 billion yuan, and the company is projected to swing from a loss in the same period last year to a profit this year. However, the quarter-on-quarter increase in net profit is expected to be only 1% to 4%, which suggests a much smaller gain than the revenue growth rate.

For the first nine months of this year, cumulative revenue is projected at 265 billion to 270 billion yuan. That would mark an increase of 725% to 741% year over year, while cumulative net profit is expected to reach 131 billion to 132.5 billion yuan. It is important to note that these are company guidance figures, not finalized results.

The company said that as demand for AI computing surged rapidly, DRAM supply could not keep up, pushing prices higher. It also cited production facility expansion and process improvements as reasons for the better results, noting that wafer output and equipment utilization have increased. In other words, the outlook reflects not only stronger demand but also improved manufacturing efficiency.

Proposal for up to 2 billion yuan in treasury share buybacks

CXMT’s chairman proposed a buyback of treasury shares worth between 1 billion and 2 billion yuan, using company cash or funds raised internally. According to reports, roughly 6% of the company’s shares are currently free float, and the market believes that if the buyback goes ahead, it could absorb around 1% of the shares in circulation. Treasury share buybacks can support a stock by reducing the number of shares available in the market and improving investor sentiment, but the actual impact will depend on the scale and execution of the plan.

Variables to watch, including concerns over technology competition

CXMT said it plans to launch server DRAM using next-generation 4F² architecture within this year. However, analysts cited in the report pointed out that developing a prototype and mass-producing a stable product at competitive cost are two very different things. Since product specifications and verified yield rates have not been disclosed, some analysts say it is difficult to conclude from the launch plan alone that the technology gap with Samsung Electronics and SK hynix has been closed. It is also worth distinguishing this product from high-bandwidth memory (HBM), as it is ordinary server DRAM rather than HBM.

This earnings outlook suggests that the boom in commodity DRAM could boost CXMT’s revenue and expand its investment capacity. In particular, how much of its profits the company channels into capacity expansion and advanced process development may shape the competitive landscape ahead. At the same time, a sharp increase in revenue does not automatically mean technological parity. Until production yield, mass-production scale, and actual product performance are confirmed, it remains important to view earnings growth and the technology gap as separate issues.