7000 points are within reach for the KOSPI as a new variable in the memory semiconductor market emerges from China. Changxin Memory Technologies (CXMT), the largest DRAM manufacturer in China, has reported explosive growth in its first earnings report since going public. While volatility has eased in August, leading semiconductor stocks have rebounded, but concerns are rising over the rapid advancement of China's memory sector, which could impact domestic companies like Samsung Electronics and SK Hynix.
According to the financial investment industry on the 30th, CXMT announced on the 28th that its revenue for the first half of the year reached 150.31 billion yuan (approximately $30.8 billion), marking an 873.64% increase compared to the same period last year. The net profit attributable to shareholders was 77.65 billion yuan (about $15.8 billion), a significant turnaround from a net loss of 2.33 billion yuan in the first half of last year.
Market expectations were also exceeded. CXMT's pre-IPO revenue forecast for the first half was between 110 billion and 120 billion yuan, with net profit expectations of 66 billion to 75 billion yuan, all of which were surpassed. The net profit for the second quarter was 52.84 billion yuan, a 113% increase from the first quarter. The gross profit margin for the first half reached 84.84%.
CXMT attributed its performance improvement to rising memory demand in the AI industry, a global DRAM supply shortage, and increasing memory prices. The rapid growth of CXMT has heightened tensions within the domestic semiconductor industry, with its market share in the global DRAM market reportedly rising to 8% in the first quarter.
CXMT made headlines when it went public on the Shanghai Stock Exchange's Sci-Tech Innovation Board on July 27, quickly becoming the top company by market capitalization in China's A-share market. The initial public offering price was 8.66 yuan, and the stock closed at 49 yuan on its first day, soaring 465.82%. As of August 28, the stock price was 58.60 yuan.
Following CXMT's listing, domestic semiconductor stocks experienced a significant decline. On July 28, the day after CXMT's debut, Samsung Electronics fell 13.39% to 220,000 won, while SK Hynix dropped 14.56% to 1,550,000 won. Concerns spread that China's rapid progress in memory independence could alter the competitive landscape of the global DRAM market.
After a downturn in July, the KOSPI found relative stability in August but has repeatedly failed to break through the 7000-point mark. This week, the impact of U.S. interest rates, global market trends, and the renewed concerns over Chinese memory companies following CXMT's results are expected to be key factors in determining whether the KOSPI can surpass 7000 points.
However, some analysts suggest that excessive concern over the impact of China's memory sector on domestic semiconductor companies may be unwarranted. Kim Dong-won, a researcher at KB Securities, stated, "Chinese AI accelerators have lower computational efficiency than NVIDIA GPUs, requiring more accelerators and memory to handle the same AI workload," adding that there remains a technological and product competitiveness gap in high-performance server DRAM. He further noted, "As Chinese AI investments expand, the benefits for Samsung Electronics are likely to increase, making it the biggest beneficiary of China's AI data center investment expansion."
* This article has been translated by AI.
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