CXMT's EBIT Margin Hits 82%, Surpassing SK Hynix and Micron
nashnova research
CXMT posted an 82% EBIT margin in Q2, ranking first among major memory makers; a DDR5 spot-price surge drove the result, but a ~20× forward P/E signals the market has already priced in aggressive growth.
How did CXMT reach an 82% margin?
CXMT's Q2 2026 EBIT margin hit 82%, above SK Hynix at 76% and Samsung Semiconductor at 70% — the highest among major global memory firms.
This means → a Chinese DRAM company has, for the first time, out-earned both Korean giants on a margin basis.
The driver: DDR5 spot prices surged after SK Hynix, Samsung, and Micron shifted capacity toward HBM — high-bandwidth memory built for AI servers — leaving mainstream DRAM in short supply.
Why is DDR5 more profitable than HBM right now?
TrendForce reports that since Q1 2026, HBM profitability has fallen below DDR5.
In plain terms = HBM ships on locked-in annual contracts, so its makers miss the upside when prices spike; DDR5 trades at market rates and captures the full rally.
KPMG partner Jun Okamoto confirmed the logic: the higher a company's share of mainstream DRAM sales, the more it gains in an up-cycle.
Who buys CXMT's chips, and how fast is it growing?
Key customers include Alibaba, ByteDance, and Tencent — China's largest cloud and internet groups. The product mix is DDR5-heavy.
Revenue grew roughly tenfold year-on-year, the fastest rate among the six major memory makers.
Absolute profit still trails SK Hynix, Samsung, and Micron, but already exceeds NAND makers Kioxia and Sandisk.
What is CXMT building after its IPO?
After its July 2026 IPO, CXMT became China's largest listed company by market cap — roughly three times Kioxia's valuation.
The company is using IPO proceeds and government backing to expand capacity in Hefei and plans a new fab in Shanghai.
This means → once the new capacity comes online, CXMT's share of the mainstream DRAM market will keep rising.
Is a ~20× forward P/E justified?
SK Hynix, Samsung, and Kioxia all trade at single-digit forward P/E ratios. CXMT trades at nearly 20×.
In plain terms = the market has already baked high growth into the stock price. Whether the premium holds depends on one variable — can DDR5 prices stay elevated?
This reflects investor confidence in China's domestic memory push, but it also means that if DDR5 prices soften, CXMT faces a steeper valuation correction than its Korean peers.
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