ChangXin Memory Technologies (CXMT) announces CNY 24.1 billion capex for capacity expansion and is building in-house DRAM testing capabilities.

Chinese memory chipmaker ChangXin Memory Technologies announced on September 28 that it is deploying CNY 18 billion (approximately $2.7 billion) in IPO proceeds toward two major projects totaling CNY 34.9 billion (approximately $5.2 billion) in combined planned investment.

The first project is a technology R&D program with a total planned investment of CNY 24.1 billion (approximately $3.6 billion), funded by CNY 13 billion in IPO proceeds and the remainder from the company's own capital. According to ChangXin, sustaining core competitiveness requires unwavering advancement in product and process technology. Facing a complex industry landscape with multiple technology paths, the company must invest in R&D to drive generational evolution of process technology, ensuring that new products achieve qualitative leaps in storage density, power consumption control, and read/write performance. The company stated this is essential to meeting market demand and building a durable competitive advantage. Through this investment, ChangXin aims to maintain technology leadership while more rapidly launching products with stronger performance and competitiveness.

The second project, executed by wholly-owned subsidiary ChangXin Storage Products (Hefei), will construct a DRAM wafer back-end testing and module assembly facility. The project carries a total planned investment of CNY 10.8 billion (approximately $1.6 billion), with CNY 5 billion (approximately $746.2 million) coming from IPO proceeds.

Testing is an indispensable part of DRAM production, but due to the specialized nature of testing equipment, as the company's production capacity expands and product variety increases, it may face insufficient testing capacity and inadequate support from external OSAT providers. To prevent testing from becoming a bottleneck and ensure supply chain security, the company needs to substantially increase in-house testing capacity. By building its own memory wafer back-end testing and module assembly operations, ChangXin can more flexibly coordinate testing utilization, reduce costs, improve operational efficiency and testing standards, and further strengthen its integrated device manufacturer (IDM) model.

ChangXin's IPO raised total proceeds of CNY 66.607 billion (approximately $9.9 billion), with net proceeds of CNY 66.31 billion after issuance expenses. The current deployment of CNY 18 billion in IPO proceeds represents approximately 27% of the net amount.

Market observers view the large-scale investment in R&D and testing capacity as reflecting the company's positive outlook on DRAM demand prospects and its determination to strengthen supply chain autonomy amid intensifying U.S.-China technology competition. ChangXin Memory Technologies, headquartered in Hefei and listed on the STAR Market of the Shanghai Stock Exchange, is viewed as a core force in China's push for memory industry self-sufficiency. In a global market dominated by Samsung Electronics, SK Hynix, and Micron, these investments are expected to help narrow the technology and scale gap with international leaders.