[Edaily Reporter SOYEON KIM ] Chinese memory chip maker Changxin Memory (CXMT), which had been operating at a loss through 2024, not only succeeded in turning a profit last year but is also projected to post a net profit of around 35 trillion won this year. Some analysts in the Chinese securities industry even predict that next year’s net profit will exceed 50 trillion won. However, concerns about an oversupply by 2028 are growing as the company is investing funds secured from the sharp rise in memory prices driven by artificial intelligence (AI) into expanding its production capacity.

According to industry sources on the 19th, CXMT announced in its preliminary third-quarter earnings report released on the 17th that it expects revenue of 114.7 billion to 119.7 billion yuan (approximately 23 trillion to 24 trillion won) and net income of 53.4 billion to 54.9 billion yuan (approximately 11 trillion won). Cumulative net profit for the first three quarters of this year reached up to 132.5 billion yuan (approximately 26.5 trillion won), which, if simply annualized, amounts to approximately 35 trillion won.

Semianalysis, a semiconductor research firm, forecasts that CXMT’s annual revenue this year will exceed $50 billion (approximately 71 trillion won). This is about 5.8 times last year’s revenue ($8.6 billion). China’s Shinhan International Securities expects next year’s revenue and net profit to reach approximately 117 trillion won and 58 trillion won, respectively.

This surge in earnings was driven by rising DRAM prices resulting from growing AI demand. As the world’s top three memory manufacturers focused their production capacity on High-Bandwidth Memory (HBM), leading to a shortage of general-purpose DRAM, CXMT also benefited from the price increases.

CXMT is simultaneously expanding its existing production facilities and developing next-generation DRAM. SemiAnalysis forecasts that CXMT’s monthly wafer production capacity will increase from 350,000 wafers at the end of this year to 420,000 wafers by the end of next year and to 500,000 wafers by the end of 2028. It is estimated that CXMT’s share of global DRAM production capacity will reach approximately 17% by the end of next year. The initial operation of CXMT’s new production facility in Shanghai and the effects of capacity expansions at its Hefei and Beijing plants are expected to take full effect next year.

This trend coincides with production facility expansions by the three major memory manufacturers—SamsungElectronics, SK hynix, and Micron. SamsungElectronics is also pushing for the 2028 launch of its Pyeongtaek Plant 5 (P5), while SK hynix is set to begin cleanroom operations at its first Yongin plant (Y1) next year. Micron is also expanding its new memory production bases, primarily in Idaho and New York.

Consequently, some observers are voicing concerns that a global memory supply glut could reoccur around 2028. While some forecasts suggest that supply shortages will persist due to AI demand, others observe that if the production capacity expansions by the three major memory manufacturers are combined with those of Chinese companies, it could trigger a decline in generic DRAM prices.