CXMT Plans to Deploy 18 Billion Yuan of Over-Raised IPO Funds to Boost DRAM Equipment Procurement and Back-End Testing

CXMT announced that it plans to use 13.00 billion yuan of over-raised IPO funds to invest in a new technology R&D project. At the same time, through a combination of capital increase and loan arrangements, it will provide 5.00 billion yuan of over-raised funds to its wholly owned subsidiary ChangXin Memory Products (Hefei) Co., Ltd. (hereinafter "CXMT Products Hefei"), which will use the money to build the new "Phase II Project of the Memory Wafer Back-End Testing Base of ChangXin Memory Products (Hefei) Co., Ltd."

The investment plans for the above new projects were approved by CXMT's board of directors on September 28, and further approval from the shareholders' meeting is required before they can proceed.

Funding background: 36.81 billion yuan over-raised, 18 billion yuan to be deployed this time

CXMT originally planned to raise 29.5 billion yuan through its IPO, mainly for technology upgrades of memory wafer manufacturing mass-production lines, DRAM memory technology upgrades, and research and development of advanced DRAM technologies. In the end, its total IPO proceeds reached 66.607 billion yuan; after deducting issuance costs of 296 million yuan, the net proceeds amounted to 66.310 billion yuan, with over-raised funds totaling 36.810 billion yuan.

The 18 billion yuan of over-raised funds proposed for use this time corresponds to a combined total investment of 34.9 billion yuan for the two new projects.

Project details: equipment-heavy on the R&D side, capacity supplementation on the back-end

DRAM technology R&D project: This project will be implemented at the 12-inch memory wafer production base in the Hefei Economic and Technological Development Zone of Anhui Province, and belongs to the business of developing next-generation DRAM core technologies and processes, with a construction period of 30 months. Notably, of the 24.1 billion yuan total investment, 22.398 billion yuan (93%) will go toward equipment procurement — although initiated under the "R&D" label, the vast majority of the investment is concentrated on acquiring production and R&D equipment.

Back-end testing capacity expansion: CXMT plans, through its subsidiary CXMT Products Hefei, to build a testing facility in Feixi County, Hefei, providing testing and module assembly services for DRAM chips, with a construction period of 37 months.

Complete technology generations, market share approaching 10%

CXMT has completed mass production from its first-generation process technology platform through its fifth-generation platform, and has achieved product coverage and generational evolution from DDR4 and LPDDR4X to DDR5, LPDDR5/5X, and LPDDR6. Its core products and process technologies have now reached an internationally advanced level.

As the world's fourth-largest DRAM maker after Samsung Electronics, SK Hynix, and Micron, according to CFM data, CXMT's DRAM sales revenue in the second quarter reached 14.545 billion USD, up 99% quarter on quarter, with its market share approaching 10% and ranking fourth. This was mainly attributable to the fact that mobile LP4X/5X products, which account for the major share of its supply, led other application markets in price increases, putting its quarter-on-quarter DRAM revenue growth at the top.