[Edaily Reporter Kim Kyung-eun ] Concerns are growing that the listing of China’s Changxin Memory Technology (CXMT) could shake up the existing oligopoly in the memory semiconductor market. However, analysts in the securities industry say it is difficult to view this as a sign of oversupply. This is because while the rate of increase in memory prices will slow, it will not be enough to resolve the supply shortage over the next one to two years. It is also considered premature to interpret this as a “peak-out” for South Korea’s leading semiconductor stocks, SamsungElectronics(005930)and SK hynix(000660).

Son In-jun, an analyst at EUGENE INVESTMENT & SECURITIES, stated in a report on the 28th, “It is premature to interpret CXMT’s IPO and the expansion of its Shanghai plant as a sign of a global DRAM supply glut.”

CXMT, the world’s fourth-largest DRAM manufacturer, went public on the Shanghai Stock Exchange on the 27th (local time). The stock closed at 49 yuan—a surge of approximately 465.82% from its initial public offering price—and instantly became the top-ranked company by market capitalization on the mainland. Concerns are being raised in the market that if CXMT uses the funds raised through its IPO to expand production capacity (Capa), the supply shortage centered on SamsungElectronics and SK hynix could ease sooner than expected.

However, EUGENE INVESTMENT & SECURITIES pointed out that nominal production capacity expansion is different from actual bit production capacity. It is understood that CXMT has not yet entered stable mass production of the 1a-nanometer (G5) process. The report explains that while the company is advancing miniaturization through multi-patterning due to its inability to secure extreme ultraviolet (EUV) lithography equipment, it faces challenges related to process complexity, cost burdens, and yield issues. In this scenario, the firm projected that CXMT’s main production process would remain at the 1z-nanometer (G4) level, maintaining a 2–3-generation technology gap compared to SamsungElectronics’ and SK hynix’s 1b and 1c-nanometer processes.

The need to expand the production share of High-Bandwidth Memory (HBM) to support China’s artificial intelligence (AI) ecosystem was also cited as a factor constraining the expansion of standard DRAM supply. It is expected that approximately half of the production capacity at the Shanghai plant will be allocated to HBM production. Analysts estimate that initial HBM yields will remain at around 10–20%, which is expected to limit the effectiveness of expanding standard DRAM production capacity.

Accordingly, the report projected that CXMT’s influence would not begin to expand in earnest until after 2029–2030. It explained that a meaningful increase in market share in the global market would only be possible once the company builds large-scale production capacity based on robust infrastructure and secures competitiveness in next-generation technologies, including 3D DRAM.

Researcher Son emphasized, “We believe it is unlikely that the expansion of the Shanghai fab, funded by CXMT’s IPO proceeds, will resolve the global DRAM supply shortage within the next one to two years,” adding, “While the long-term growth potential of China’s DRAM industry should not be underestimated, the current market is overestimating the potential of CXMT’s nominal capacity expansion to actually resolve the supply shortage.”

He also assessed that recent market concerns about a “peak-out” in memory prices are excessive. While the quarterly growth rate of memory prices is expected to peak in the first quarter of next year and the annual growth rate in the third quarter of next year before slowing down, this does not signify the start of a price decline. This assessment is based on the fact that, historically, there has been an average lag of more than four quarters between the peak in the price growth rate and the actual decline in prices. The analysis suggests that the current artificial intelligence (AI) supercycle is likely to result in a longer-lasting market upswing, as data center demand is stronger than in the past.

Researcher Son stated, “The current slowdown in the rate of price increases does not mean that the supply shortage is being resolved; rather, it is closer to a natural adjustment in pace driven by higher prices and profitability.” He added, “It is overly simplistic to interpret that the memory market will immediately enter a downturn simply because the rate of price increases has peaked.”