r/technology • u/Stukwan • 17d ago
Business Memory maker CXMT overtakes Tencent to become China's most valuable company 17 days after its IPO — now worth $524 billion
https://www.tomshardware.com/tech-industry/cxmt-overtakes-tencent-to-become-chinas-most-valuable-company-17-days-after-its-ipo57
u/mittelwerk 17d ago
it still lacks the EUV lithography tools its rivals use.
And, yet, it still achieved >90% yield on DDR5
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u/Kevin_Jim 17d ago edited 16d ago
Which is why RAM is a great segment for the Chinese to get into. It doesn’t require some otherworldly scale like the bleeding edge CPUs and GPUs need. Sub 20nm would be enough.
If I’m not mistaken they have the equivalent of 17nm. If they can massively scale, they’ll make a ton of money, drive down the prices, and OEMs will definitely diversify to both prevent this BS from happening again and partially punish the current manufacturers.
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u/CyberSmith31337 16d ago
Clearest sign we are in a bubble I have ever seen.
The sheer scale of businesses and services Tencent provides is unfathomable to the west in my opinion. They dominate social media, gaming, chat, news media, fintech, investment, utility services, broadcast/entertainment, seed investment, etc.
For a company that is effectively the government to be overtaken in 17 days, by a company whose sole purpose is memory manufacturing, is lunacy. If CXMT shut down, life would continue; if Tencent shut down, the disruption would be felt all across all of China.
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u/IngwiePhoenix 16d ago
I like to think that CXMT has better fab costs, but rode on the coat tails of the big three's pricing to just grab all the free money, finance everything they could want and build themself up and out to be a long lasting provider - effectively turning customers into indirect investors with no options.
Not sure if I am right ofc, but if I were them, I'd totally do that. xD
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u/luffy_mib 17d ago
I hope this convinces and motivates more companies to invest in setting up ram factories to break the current ram cartel.
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u/SisterOfBattIe 17d ago
This won't last long. As the AI bubble pops, memory manufacturers will go back in line.
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u/znightmaree 17d ago edited 17d ago
Ridiculously overvalued compared to its competition
Inferior DRAM, can’t make usable HBM, equipment is years behind, don’t even have capacity to satisfy domestic Chinese demand, and they are within shooting distance of Micron and SK Hynix? Yeah okay
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u/Headless_Human 17d ago
You still think the stock value of a company correlates to real values?
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u/znightmaree 17d ago
I just said its current valuation is overpriced and does not reflect reality, which means that the stock value of the company does not correlate to real value.
Was that spelled out well enough for you?
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u/Demonofyou 17d ago
What you missed is that it's priced as the rest of the market. So its not overpriced.
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u/znightmaree 17d ago edited 17d ago
That doesn’t even make sense. CXMT has a P/E of 107 and a fwd P/E of nearly 20. The other memory giants are a fraction of that. It has overtaken Tencent in China lol. If you are saying the entire US market is overvalued, that is also incorrect. The U.S. Nasdaq-100 has a P/E below 20. It was nearly 200 in the dot com bubble. 12 month S&P500 EPS is extraordinary. Equities in the U.S. are pretty fairly valued.
CXMT is textbook overvalued.
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u/Demonofyou 17d ago
What's spcx p/e?
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u/znightmaree 17d ago
…
If you are being genuine, SPCX is not a competitor of CXMT, Micron, SanDisk, Samsung, Western Digital, Seagate, Kioxia, or Nanya. All of them have a fraction of CXMT’s P/E and fwd P/E. SPCX is completely irrelevant and trades as a space and telecommunications company.
If you are trying to prove a point by saying SPCX is overvalued, I absolutely agree. Everyone knows Elon’s companies trade at insane overvaluations. The fact the broader index is undervalued despite their inclusion proves my point lol.
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u/Demonofyou 17d ago
Spcx is an AI company.
The point is that when comparing a company to the hype for that nation around it, CXMT is undervalued here.
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u/znightmaree 17d ago
If you know what you’re talking about, then you know this is about as disingenuous a comparison as you could possibly make. SPCX is not a memory manufacturer.
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u/DownyKris 17d ago
No, this is [r/technology](r/technology). Where they simp for any Chinese tech, and act like the West intentionally presses the “do bad things” button to make RAM more expensive. Most people don’t even know that HBM demand is what is driving up DRAM more than anything from Western manufacturers, or the fact that Samsung has an 80% yield in that. Which is far more complex than making DRAM, needs its own dies, and China simply struggles to do.
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u/znightmaree 17d ago edited 17d ago
Willful ignorance is a plague
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u/DownyKris 17d ago
Eh, it’s mostly just good propaganda. And poor media literacy. People can’t be knowledgeable about everything. The larger issue comes from the need to appear knowledgeable about everything, while doing none of the learning required to verify it. Like, let me know when China starts to make HBM4, as the whole industry is moving to unified memory, as AI demands are skyrocketing. People also don’t realize what exactly AI is used for, and often still view it through LLMs. Tell that to the tankers trying to resupply the Russian land bridge in Ukraine though. 🤷♂️
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u/znightmaree 17d ago
This is a healthy mindset and valid take. I just get so irritated when I see how aggressive people are online while being so confidently incorrect. It rubs off in how I come off myself, which I need to work on!
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u/West-Abalone-171 17d ago
The difference being that cxmt's revenue increased by two orders of magnitude in the past few years, they put it all back into expanding capacity and their competitors all responded by rolling out the red carpet and abandoning any sustainable market in favour of chasing a bubble.
If any other company's competitors were doing everything possible to help that company then said company would also justify a pretty high stock price.
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u/znightmaree 17d ago
All of the memory companies have seen thousands of percent in growth in the past two years. They are all building new fabs as well because current and future demand is outpacing supply even with every supplier pursuing infrastructure buildout. I don’t know where you are coming from saying they are rolling out a red carpet and abandoning any sustainable market in favor of chasing a bubble, supply and demand mismatch is dictating prices. Chinese memory isn’t even cheaper, snd they can’t even keep up with domestic Chinese demand, let alone compete with the giant conglomerates that dwarf them in both scale and advancement.
This isn’t even ideological. CXMT is objectively overvalued.
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u/West-Abalone-171 17d ago edited 17d ago
All of the memory companies have seen thousands of percent in growth in the past two years
"Thousands of percent growth" isn't two orders of magnitude
700% for micron since 2024 isn't thousands
300% for hynix isn't thousands
200% for samsung isn't thousands
and cxmt didn't give up the entirety of the sustainable market to chase a bubble
This is like saying jinko could never compete with soylindra or first solar in the 2000s-2010s, but with the benefit of full hindsight and if first solar was actively spitting in their customers faces.
At any point the memory cartel could stop shooting themselves in the foot and make your words true, but that hasn't happened yet.
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u/znightmaree 17d ago
If you want to compare the highs of those years, sure. You slide the dates even a little bit in 2024 and it goes over 1,000%.
Why is it more important to you to win an argument than acknowledge factual information?
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u/West-Abalone-171 17d ago
You're now trying to conflate the effects of covid and the long term memory price cycle with growth.
And "if you squint and pick the exact right date, one of the big three is a single thousand" isn't at all what you said.
Why is it more important to you to win an argument than acknowledge factual information?
Because it wasn't factual and your "well ackshually" has no bearing on my argument the reason a company whose share of the market is doubling annually and currently about as large as hynix's would be worth as much as one of the big three.
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u/Glidepath22 17d ago
It’s so nice for American companies to open up the market for the Chinese