TechFlow reports that on June 29, according to Reuters, three knowledgeable sources revealed that Chinese memory chip manufacturer CXMT has signed a long-term supply agreement with Tencent Holdings (0700.HK) prior to its highly anticipated IPO, worth over 20 billion yuan (approximately $2.94 billion). Sources stated that the agreement covers server DRAM (Dynamic Random Access Memory) chip supply for the coming years, with two sources stating the contract term is up to 3 years, while another indicated it could reach up to 5 years. As the details are confidential, all three sources requested anonymity. The report states that DRAM is a key component for servers supporting cloud computing, databases, and AI workloads, and against the backdrop of global continuous shortages and soaring memory chip costs, long-term supply contracts have become a priority for enterprises. It remains unclear whether the agreement includes more details such as CXMT's High Bandwidth Memory (HBM). Neither CXMT nor Tencent immediately responded to requests for comment.
The report pointed out that this previously unreported transaction coincides with a critical node for CXMT—the company received approval from the Shanghai Stock Exchange in May to conduct an Initial Public Offering (IPO) on the STAR Market, planning to raise 29.5 billion yuan, expected to become one of the largest listing projects in mainland China in years. Two sources also stated that CXMT is negotiating similar collaborations with other major Chinese internet companies. According to its prospectus, Tencent, Alibaba Cloud, ByteDance, Lenovo, and Xiaomi are all its major customers.
Financially, CXMT is the fourth largest DRAM manufacturer globally in 2025, with a market share of approximately 7.7%, first-quarter revenue reached 50.8 billion yuan, a year-on-year increase of 700%, and net profit was 25 billion yuan, compared to a loss of 1.6 billion yuan in the same period last year. Additionally, according to three sources, CXMT is actively expanding production; in addition to the existing Shanghai factory focusing on HBM packaging, it has built a new DRAM factory in Shanghai, and plans to double the monthly DRAM wafer capacity from the current approximately 300,000 wafers to approximately 600,000 wafers in the future. However, the company still faces challenges, with one source stating that CXMT's yield rate on new generation DDR5 memory products was low in the first quarter.
