Chinese memory semiconductor company Changxin Memory Technologies (CXMT) is rapidly increasing its production and market share, positioning itself to compete with Samsung Electronics, SK Hynix, and U.S. firm Micron. However, analysts warn that the lack of extreme ultraviolet (EUV) lithography equipment could hinder its ability to close the technology gap.
On July 26, Bloomberg reported that Nomura Securities issued a buy recommendation for CXMT, setting a target price of 116 yuan, which is 1,239% higher than its initial public offering (IPO) price of 8.66 yuan.
On its first day of trading on the Shanghai Stock Exchange, CXMT's shares surged to 55.03 yuan, a 535% increase from the IPO price. Nomura's target price is approximately 111% above the day's peak.
Donny Teng, a Nomura analyst, stated, "In the coming years, global memory semiconductor supply will struggle to keep pace with demand, allowing CXMT to increase its market share more rapidly." He noted that the rise of 'agentic AI,' which can perform multiple tasks autonomously, is expected to drive global memory semiconductor usage up more than sevenfold by 2030.
Nomura forecasts that CXMT's memory semiconductor production will grow by 40-45% annually through 2030, with its share of the global DRAM market expected to rise from about 10% to 18% by the end of 2028.
The target price set by Nomura is based on anticipated profits for CXMT in 2028, suggesting that the company could achieve a valuation nearly double that of its U.S. competitor Micron.
In contrast, Morningstar has set a fair value for CXMT at 14.90 yuan, which is only about one-eighth of Nomura's target and significantly lower than the stock's debut price.
Morningstar analyst Jing Jie Wei identified the lack of EUV equipment as the biggest risk for CXMT. EUV technology is essential for creating smaller and more precise semiconductor circuits.
Morningstar believes that without EUV equipment, CXMT will struggle to enhance DRAM performance using existing production methods. The company is currently at a technological disadvantage compared to Samsung, SK Hynix, and Micron, leading it to sell products at lower prices and with reduced profitability.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.