CXMT Pursues Long Term Supply Deals as Memory Demand Surges and 4F² Chips Near Customer Testing

Strong demand meets a new manufacturing milestone

China's ChangXin Memory Technologies, known as CXMT, says it has been negotiating long term supply agreements with several leading customers as demand for server memory outstrips supply. The company reported third quarter revenue of 118.714 billion yuan and said its next manufacturing platform had completed engineering sample validation, with the first server products using its 4F² architecture scheduled for customer sampling by the end of 2026.

Management outlined the plans at an earnings briefing on October 30, 2026. An investor relations record released on October 31 added detail on customer agreements, the company's technology choices and its expectations for continued revenue growth in the fourth quarter and in 2027.

The commercial and technical developments are closely connected. Customers seeking reliable supplies give CXMT a clearer picture of future demand. A manufacturing design that fits more memory into a given area could help it serve that demand with products aimed at servers, where customers pay for capacity, reliability and technical support.

CXMT's third quarter revenue rose 613.18% from a year earlier. Profit attributable to shareholders of the parent company reached 54.435 billion yuan, reversing a loss a year earlier and increasing 3.01% from the preceding quarter. Its gross margin reached 89.53%, helped by rising prices and a shift toward more valuable products.

The immediate business remains driven by existing products, especially DDR5 server memory. The new 4F² platform is a longer term investment: customer testing will determine how quickly the engineering milestone becomes commercial production.

What the supply agreements would change

CXMT said negotiations with several major customers were progressing smoothly. Management described the purpose as securing predictable demand over the medium and long term, giving the company a firmer basis for planning production and investment.

A memory factory requires expensive equipment and careful decisions about which products to manufacture. More predictable customer demand helps a supplier decide how much capacity to build and how to divide that capacity between server, mobile and other memory products.

CXMT did not identify the customers or disclose contract volumes, duration, pricing terms or a signing timetable. Its description places the agreements at the negotiation stage.

Management expects the shortage of DRAM, the working memory used by computers while they process information, to continue through the fourth quarter. AI server demand remains strong, while demand from conventional servers is holding steady. DDR5, one of its main product lines, remains in short supply.

The company plans to use customer demand, product competitiveness, profitability and investment efficiency to shape its capital spending for 2027. Long term agreements would therefore connect customer purchasing plans with decisions about the next round of factory investment.

Revenue rises faster than shareholder profit

CXMT reported revenue of 269.024 billion yuan for the first nine months of 2026, up 738.51% from a year earlier. Profit attributable to parent company shareholders reached 132.04 billion yuan, compared with a loss of 5.28 billion yuan in the same period of 2025.

The third quarter alone contributed about 44.1% of revenue for the first nine months, calculated from 118.714 billion yuan out of 269.024 billion yuan. The concentration shows how strongly sales accelerated as the year progressed.

Profit attributable to parent shareholders rose more slowly between quarters. It increased from 52.843 billion yuan in the second quarter to 54.435 billion yuan in the third, placing the result within the company's earlier forecast range of 53.395 billion to 54.895 billion yuan.

Management linked the modest quarterly increase to ownership arrangements at two subsidiaries, ChangXin Xinqiao and ChangXin Jidian. Both recorded revenue and profit growth of more than 50% from the preceding quarter and were major drivers of group growth.

At the end of June, CXMT and its subsidiaries directly held stakes of 30.68% in ChangXin Xinqiao and 31.72% in ChangXin Jidian. Some earnings from those businesses therefore belong to other shareholders. Consolidated accounts can include a controlled subsidiary's business while allocating part of its profit to those outside owners.

CXMT increased its investment in ChangXin Jidian in August, raising its ownership interest. For the first nine months, the company gave total net profit of about 196.5 billion yuan, compared with 132.04 billion yuan attributable to parent shareholders. The ownership structure helps explain the gap between those two measures.

Higher prices and DDR5 lift margins

CXMT's gross margin for the first nine months reached 86.85%, an increase of 2.11 percentage points from the first half. Third quarter gross margin was 89.53%, up 1.94 percentage points from the second quarter.

Gross margin measures the share of sales left after the direct cost of making the products. At a margin of 89.53%, approximately 89.53 yuan remains from each 100 yuan of revenue before research, administration, taxes and other expenses.

Management attributed the improvement to higher selling prices, a more profitable product mix and falling production costs per unit. Prices for enterprise products rose more strongly than those for consumer products. The company said its pricing broadly followed industry conditions and differed little from overseas suppliers.

DDR products generated 69.472 billion yuan in the first half, or 46.22% of revenue. LPDDR products generated 78.191 billion yuan, or 52.02%. LPDDR is memory designed to use less power, making it important for phones and other devices that run on batteries.

The share from DDR products continued to rise through September as DDR5 sales expanded following volume production. Management expects fourth quarter gross margin to remain stable, supported by tight supply, existing orders, efforts to reduce manufacturing waste and the cost benefits of producing at scale.

What has changed in the 4F² program

CXMT disclosed that its sixth generation manufacturing platform uses a 4F² architecture and has completed engineering sample validation. This means its core performance targets have been tested on actual silicon wafers, the discs on which chips are manufactured.

The update follows the company's October technology announcement, when president Cao Kanyu presented the architecture in Shanghai. That announcement prompted sharp falls in shares of established memory suppliers as investors reassessed the pace of Chinese competition.

The first planned product is a DDR5 RDIMM, a memory module intended for servers. RDIMM stands for registered dual inline memory module. Its circuitry helps manage electrical signals in systems that need substantial amounts of memory.

Customer samples are expected by the end of 2026. A date for volume production has not been announced; management said the schedule would depend on customer validation and market demand.

The main steps disclosed so far are:

• 2019: CXMT began developing its own hybrid bonding technology, which connects separately manufactured structures.
• October 10, 2026: Cao presented progress on the 4F² architecture at an industry conference in Shanghai.
• October 30: Management disclosed that the sixth generation platform had completed engineering sample validation.
• October 31: The company released the investor relations record of its earnings briefing.
• By the end of 2026: CXMT plans to send its first DDR5 RDIMM products using 4F² to customers for testing.

Why smaller memory cells matter

A DRAM chip stores information in tiny cells. Each cell uses a transistor to control access and a capacitor to hold an electrical charge. Shrinking those cells allows a manufacturer to fit more memory into the same area.

The labels 6F² and 4F² describe cell area relative to a minimum manufacturing dimension, represented by F. At the same value of F, a 4F² cell occupies two thirds of the area of a 6F² cell, a reduction of about one third.

CXMT's design uses a transistor called a Vertical Surrounding Gate, or VSG. The transistor's control gate surrounds a vertical channel, helping control current and reduce unwanted electrical leakage as components become smaller.

The company also separates the manufacturing of memory structures from that of supporting CMOS circuitry, then connects them through hybrid bonding at the wafer level. This gives engineers more freedom to adjust the memory and supporting circuits separately.

CXMT has pursued research and patent filings related to 4F² since its establishment, with more than 300 publicly disclosed patent families. A patent family groups filings associated with the same invention. Research spending reached 11.071 billion yuan in the first nine months of 2026, up about 73.03% from a year earlier.

For server customers, the next task is practical testing: checking whether the modules operate reliably with their processors, motherboards and software under sustained workloads. Those checks are central to the commercial schedule.

Micron takes a different technical route

Micron president and chief technology and products officer Scott DeBoer said earlier in October that his company would continue along the 6F² route while developing 3D DRAM, rather than adopt 4F². He cited complexity, cost and doubts about the benefits of further shrinking that design.

DeBoer's argument focused on the capacitor. Its size and spacing help determine how densely memory can be packed, so the economics depend on more than the transistor layout.

CXMT management addressed that issue at its earnings briefing, saying that increasing DRAM density requires engineers to balance the space needed for word lines, bit lines and capacitors. Word lines and bit lines are the electrical pathways used to select cells and move information.

Management said manufacturers can reach different decisions because they have different research histories, factory equipment, patents and spending plans. Manufacturing complexity, the number of patterning steps and the heat used during production also affect costs.

Samsung and SK Hynix are also researching 4F² designs. The competitive contest now includes both the choice of architecture and each company's ability to turn it into reliable, economical production. CXMT said advanced technologies and new products would contribute to competitiveness over time rather than immediately deliver all their financial benefits.

Phones and cars broaden the customer base

CXMT said its LPDDR6 memory had made its debut in products from a leading smartphone brand and that shipments were increasing. It also plans to expand the technology into automotive and server applications.

AI features running directly on phones and personal computers create demand for memory that can move more information while using less electricity. CXMT expects demand for LPDDR5X and LPDDR6 to grow as large AI models reach these devices, and anticipates a larger share of the market for AI on devices and smart terminals in 2027.

Automotive memory is another target. More sophisticated vehicle computing increases the amount of information cars need to process, and CXMT says its presence in automotive supply chains and its market share are rising.

The company's expansion builds on its earlier DDR5 production expansion and growth in the global DRAM market. Its current strategy brings together higher capacity server products, memory designed for lower power use and automotive applications.

CXMT president Cao Kanyu expects strong server demand to support further revenue growth in the fourth quarter. Management also projects revenue growth in 2027, with AI, smart devices and vehicle computing among the main sources of demand.

Investment plans follow customer demand

CXMT's next spending decisions will bring together two different schedules. Existing products are benefiting from shortages and rising prices now, while the new architecture still needs customer approval before volume production can begin.

Long term supply negotiations could give the company more confidence about future sales. Customer validation of the new DDR5 RDIMM would provide a separate basis for deciding when to commit manufacturing resources to 4F² products.

Investors have already priced in substantial growth. CXMT shares closed at 41.8 yuan on October 30, with a market value of 2.8376 trillion yuan and a gain of 149% since the start of the year.

The next disclosed milestone is the delivery of customer samples by year end. Alongside that technical schedule, the company's fourth quarter performance will show how continued shortages, product prices and subsidiary ownership affect the earnings that reach parent shareholders.

Key Points

• CXMT is negotiating long term supply agreements with several leading customers to secure future demand.
• Third quarter revenue reached 118.714 billion yuan, while profit attributable to parent shareholders was 54.435 billion yuan.
• Third quarter gross margin rose to 89.53%; management expects a stable margin in the fourth quarter.
• The sixth generation manufacturing platform uses 4F² and has completed engineering sample validation.
• The first DDR5 RDIMM customer samples are planned for the end of 2026, with volume production dependent on testing and demand.
• Management expects revenue growth in the fourth quarter and in 2027, supported by servers, smart devices and automotive applications.