Chinese memory chipmaker ChangXin Memory Technologies, known as CXMT, has locked in a major long-term supply contract with internet giant Tencent Holdings worth more than 20 billion yuan — approximately $2.94 billion — just before the company’s highly anticipated stock market debut, according to three individuals with knowledge of the deal who requested anonymity because the details are not public.
The contract involves the supply of DRAM chips for servers over a span of several years. Two of the sources indicated the agreement runs up to three years, while a third source said it could extend as long as five years.
DRAM, which stands for dynamic random-access memory, is a vital component that allows servers to handle cloud computing, database operations, and artificial intelligence tasks. Data centers depend on DRAM to keep applications running smoothly, and with a prolonged global shortage driving memory chip prices sharply higher, major tech companies have been eager to secure long-term supply commitments.
It remains unclear whether the deal includes CXMT’s high-bandwidth memory, or HBM — a specialized chip type that plays a key role in high-performance AI computing. Neither CXMT nor Tencent responded to requests for comment.
Established in 2016 with support from the Chinese government, CXMT is at the center of China’s effort to compete in a global DRAM market that has long been controlled by South Korean and American companies.
The deal, which had not been previously reported, comes at a pivotal moment for CXMT. In May, the Shanghai Stock Exchange approved the company’s application for an initial public offering on the STAR Market, with plans to raise 29.5 billion yuan in what could rank among the largest listings on mainland China in years.
The scale of Tencent’s commitment represents a significant vote of confidence in the Hefei-based chipmaker, which has historically been seen as trailing far behind global industry leaders. Two additional sources said CXMT is also in talks with other major Chinese internet firms about similar arrangements. According to its IPO filing, the company already counts Tencent, Alibaba Cloud, ByteDance, Lenovo, and Xiaomi among its key customers.
Explosive Growth
The Tencent agreement reflects a wider transformation underway in China’s technology supply chain, as leading domestic internet companies race to secure memory chip supply during a global shortage.
DRAM contract prices jumped roughly 95% quarter-over-quarter in the first three months of 2026, according to UBS, which projects the memory market upswing to continue at least through late 2027. The investment bank estimates the global memory market could hit $786 billion this year and grow to $1.2 trillion by 2027.
CXMT, which held approximately 7.7% of the global DRAM market in 2025 — making it the world’s fourth-largest producer — has seen remarkable growth during this upcycle. The company posted first-quarter revenue of 50.8 billion yuan, a 700% jump compared to the same period a year earlier, and recorded a net profit of 25 billion yuan, a sharp turnaround from a loss of 1.6 billion yuan in the prior-year quarter.
Long-term contracts featuring set price ranges and advance payments have become standard practice across the industry, with major cloud computing companies — often called hyperscalers — locking in supply commitments, sometimes covering more than half of their needs over three-to-five-year terms, according to UBS.
Doubling Production Capacity
CXMT is moving aggressively to expand its manufacturing output to take advantage of the current market conditions, according to multiple sources.
Beyond its existing Shanghai facility focused on high-bandwidth memory packaging, the company has broken ground on a new DRAM manufacturing plant in the same city, two sources confirmed. Currently, CXMT operates two 12-inch DRAM fabrication plants in Hefei and one in Beijing, with a combined monthly output of around 300,000 wafers.
Once the new Shanghai plant and other additional capacity come online, CXMT’s total DRAM wafer production is expected to double to approximately 600,000 wafers per month, all three sources said.
Still, the company faces hurdles. One source noted that CXMT struggled with low production yields on its DDR5 next-generation memory products during the first quarter — a reminder that a meaningful technology gap still separates the company from the world’s leading chipmakers.
(Exchange rate: $1 = 6.7982 Chinese yuan)
