Chinese DRAM vendor Changxin Technology reports 82% profit margin, ranking top in sector profitability during AI memory demand surge.

In a recent analysis, Nikkei compared the financial reports of Samsung Electronics, SK Hynix, Micron Technology (covering March–May), Kioxia Holdings, SanDisk, and Changxin Technology (covering April–June). The comparison revealed that Changxin’s profit margin has surpassed those of both SK Hynix and Samsung’s semiconductor division.

Amid surging artificial intelligence (AI) demand in the storage chip sector, Chinese manufacturers are rapidly closing the gap with established rivals. Changxin Technology Group (CXMT), which listed on the stock exchange in July, reported an operating profit margin of 82% between April and June—the highest among all major industry players. This performance is actively reshaping a market long dominated by South Korean, American, and Japanese firms.

Drawing on data from QUICK FactSet and official corporate disclosures, Nikkei’s analysis utilized EBIT (Earnings Before Interest and Taxes) as a proxy for operating profit across the six companies. Specializing in DRAM for short-term memory applications, Changxin serves major Chinese technology firms including Alibaba Group, ByteDance, and Tencent Holdings. Its operating profit surged to approximately 1.9 trillion yen during the April–June period, a dramatic turnaround from a loss of roughly 29 billion yen in the same timeframe last year.

While its absolute profit figures still trail South Korean competitors and Micron, Changxin has overtaken Kioxia and SanDisk, which primarily produce NAND flash memory for long-term storage. Operating revenue climbed tenfold year-over-year to approximately 2.3 trillion yen, marking the fastest growth rate among the six analyzed companies. Most notably, Changxin’s profit margin significantly outpaced SK Hynix’s 76% and Samsung’s semiconductor division’s 70%.

SK Hynix, Samsung, and Micron are currently prioritizing the development of High Bandwidth Memory (HBM), a stacked-DRAM architecture essential for powering high-performance AI servers. By contrast, Changxin’s core offerings center on mainstream DRAM, particularly DDR5, which is widely deployed in data centers as well as consumer electronics like personal computers and gaming consoles. As SK Hynix and Samsung redirect production capacity toward AI server components, the supply of conventional memory chips for PCs and other devices has tightened, driving a sharp increase in DDR5 pricing. Changxin stands to be the primary beneficiary of this market shift.

Contract structures further differentiate the two technologies. HBM typically relies on multi-year supply agreements with major cloud providers, insulating it from short-term volatility. DDR5, however, trades in a more cyclical market highly sensitive to sentiment shifts, resulting in pronounced price spikes. Reflecting this dynamic, Taiwan-based research firm Trend Force noted that “since the January-March period, the profitability of HBM has begun to fall below that of DDR5.”

Bolstered by improved profitability, Changxin’s capacity for capital investment is expanding. Between January and June, its free cash flow (FCF)—calculated as the sum of operating and investing cash flows—reached approximately 2.2 trillion yen, representing a 2.8 trillion yen year-over-year improvement. Leveraging capital raised through its recent IPO and backed by government support, Changxin plans to aggressively expand its manufacturing capacity.

According to QUICK FactSet data, Changxin’s total market capitalization has reached 87 trillion yen, surpassing Tencent Holdings to claim the highest market value among Chinese-listed companies. This valuation is nearly triple that of Kioxia, which stands at 31 trillion yen. Historically, the storage chip industry has traded at low multiples due to cyclical market conditions and volatile earnings. Consequently, the P/E ratios of SK Hynix, Samsung, and Kioxia remain in single digits. Changxin’s P/E ratio, however, approaches 20x, signaling strong investor confidence in its near-term growth trajectory.

This trajectory mirrors broader trends in Chinese manufacturing, which has historically captured market share by producing competitively priced, standardized goods while steadily upgrading technological capabilities. In the electric vehicle battery sector, where Japanese and South Korean firms once held dominance, Contemporary Amperex Technology (CATL) has risen to lead global market share. Similar globally competitive players have also emerged in the home appliance and smartphone industries.

Within China’s semiconductor landscape, Changjiang Storage Holdings (CCSH), the parent company of YMTC, has also filed for an IPO. Once listed, it will emerge as a direct competitor to Kioxia in the NAND flash memory space. As Chinese manufacturers scale production and deploy aggressive pricing strategies, they are poised to disrupt global supply dynamics and fundamentally reshape the existing balance of power in the semiconductor industry.