The listing of CXMT on the A-share market was presented as a moment of maturation for the Chinese DRAM industry. Within days, the company achieved leading positions in market capitalization and first-day trading growth, bringing the Chinese player to par with giants such as Samsung, SK Hynix, and Micron. However, a shadow looms over this story.
In 2016, the same year CXMT emerged, China also supported another contender in the DRAM market—Jinhua Integrated Circuit. Both companies shared a similar mission, plans to build a 12-inch fab, and comparable multi-billion funding. Yet, after ten years, they chose drastically different development trajectories.
Jinhua opted for the fastest available path at the time: deep technological partnership with the Taiwanese company UMC. UMC developed 32nm DRAM manufacturing technology, while Jinhua provided financing and built the 12-inch fab, acquiring intellectual property in return. Construction began in July 2016 with initial investments of about 37 billion yuan, targeting 60,000 wafers per month by 2018, which briefly put Jinhua ahead of CXMT, which was still quietly building its team.
The turning point came in 2017 when Micron sued UMC and Jinhua in Taiwan and the United States. The lawsuit alleged that former Micron employees in Taiwan had transferred UMC's DRAM trade secrets to Jinhua. The dispute intensified over several months. On October 29, 2018, the U.S. Department of Commerce placed Jinhua on the Entity List.
American equipment suppliers recalled engineers on site, suspended installation, froze shipments, and ceased phone and email support. Just two days later, UMC suspended cooperation with Jinhua, severing the technical foundation upon which the fab was built. A month later, the U.S. Department of Justice charged Jinhua, UMC, and several individuals with economic espionage. The legal battles dragged on: UMC settled with the Department of Justice in 2020, UMC and Micron reached an agreement in 2021, and Jinhua and Micron finalized a global settlement in late 2023. In February 2024, a California federal court ruled that the prosecution failed to prove theft of trade secrets. Jinhua avoided a criminal conviction but lost five years relative to its planned production start. By the time Jinhua was supposed to begin DRAM production in 2018, it hadn't happened, whereas in 2023, the AI-driven memory boom lifted CXMT.
CXMT succeeded because the situation changed beneath it. From the outset, the company actively invested in research and development and intellectual property. In late 2019, it signed a licensing and patent acquisition agreement with Polaris, a subsidiary of WiLAN, gaining rights to DRAM patents originally held by the German company Qimonda. By the time CXMT scaled up production, China's broader semiconductor supply chain had noticeably matured. Although the company's IPO prospectus still showed a loss of 9.05 billion yuan in 2024, the first annual profit was not expected until 2025. Furthermore, the Ministry of Defense included CXMT in the list of Chinese military companies 1260H, and Congress continues to push for stricter export controls. CXMT stands as an example of success, while Jinhua serves as a reminder of how narrow that path was.