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Summary of article:
Changxin Technology’s third-quarter financial report bounced back. Tight supply and demand for DRAM driven by AI drove revenues and profits. However, foreign media warned that the pace of increase in the price of traditional memory may slow down.
China’s DRAM memory leader Changxin Technology announced its third quarter financial report on the 30th. Benefiting from tight supply driven by artificial intelligence (AI), revenue was 118.7 billion RMB, an annual increase of 613%; Net profit was RMB 54.4 billion, turning a loss into a profit.
However, foreign media believe that the revenue growth rate slowed down in the third quarter and the profit was almost the same as the previous quarter, indicating that the pace of price increase of traditional memory may cool down.
Changxin’s cumulative revenue in the first three quarters of this year has reached RMB 269 billion, an annual increase of 738%, with a net profit of RMB 132 billion, making a stunning reversal from the huge loss in the same period last year, reaching a profit of RMB 100 billion this year.
Bloomberg reported that the main driving force for this performance explosion came from the DRAM demand frenzy resulting from the global AI computing power arms race. Reallocation of production capacity by major global manufacturers and structural shortage of supply have caused both the price and sales volume of DRAM products to increase significantly, and Changxin Technology has been able to increase both volume and price.
Gross profit margin in the third quarter was as high as 89.53%, an increase of 1.94 percentage points from the previous quarter. This profitability is on par with or even exceeds the global memory giant’s best historical levels.
Changxin Technology has actively expanded production, and its global market share has grown from 4% a year ago to 10% at the end of the second quarter, making it an important player in promoting semiconductor independence in China.
However, rising prices have also suppressed demand, forcing some mobile phone brands to cut production of low-end models. Morningstar analyst Jing Ji Yu said consumer electronics accounts for about 30% to 40% of global memory demand, and customer resistance to price increases could hold back profits in the next few quarters. Research organization TrendForce also expects traditional memory price growth to slow in the second half of 2026.
Changxin is investing its profits in production expansion and technology upgrades to improve cost efficiency through its fifth-generation production platform. In October, it revealed a 4F² memory unit architecture, while deploying high-end HBM and studying how to advance manufacturing technology under US equipment sanctions.
However, Counterpoint Research analyst MS Huang believes that although Changxin may threaten the current leaders in the long term, it is still not enough to fundamentally change the market competition pattern.
At the same time, Changxin Technology also announced that it plans to repurchase shares ranging from RMB 1 billion to RMB 2 billion, with the maximum repurchase price of RMB 72.6 per share. The repurchased shares will be used to cancel equity incentives and capital reductions, demonstrating management’s high confidence in the long-term value of the company.
Summary FAQ
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Driven mainly by the demand for AI computing power due to the tight supply of DRAM, global production capacity reallocation and structural reduction in prices and sales, Changxin’s revenue increased by 613% year-on-year, and it successfully turned losses into profits.
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Bloomberg reported that revenue growth slowed in the third quarter and profits were about the same as the previous quarter, indicating that the pace of price increases may not be sustainable; Additionally, demand for consumer electronics may be depressed by price increases, and profits may stagnate over the next few quarters.
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Changxin is investing profits in production expansion and technology upgrading, promoting the fifth-generation production platform, 4F² memory unit and HBM layout, and announced the repurchase of 1 billion to 2 billion yuan of shares for equity promotion and capital cancellation.
