CXMT plans second chip plant in Beijing and is in talks on its funding, sources say

CXMT, China's largest chipmaker by market value, is considering building a second memory-chip plant in Beijing and is in financing talks with a tech manufacturing hub backed by the local government, two sources familiar with the matter said.

The move comes as CXMT seeks to boost production amid a global chip shortage driven by AI infrastructure spending. It highlights intensifying competition among Chinese local governments to attract CXMT, as the memory chipmaker pursues a major expansion following its $8.6 ‌billion IPO last month, ⁠the largest mainland ⁠Chinese semiconductor listing on record.

Reuters previously reported that CXMT was building new plants in Shanghai and Hefei and was in discussions with authorities elsewhere about another facility. Those projects, when fully operational, could ​double its capacity to more than 600,000 wafers per month.


The new Beijing 12-inch plant would be built in Yizhuang, about 20 km (12 miles) southeast of central Beijing, where ​CXMT already operates a fab producing dynamic random access memory (DRAM) chips, the sources said. They declined to be identified as the plans are not public.

CXMT is seeking at least 60 million yuan ($8.9 million) in support from the development zone's governing body, also known as the Beijing Economic-Technological Development Area, and other state-owned tech companies have also expressed interest in participating in the financing, they said.

The talks are at an early ⁠stage and ‌the size and structure of any funding package could change, the sources said. It was not immediately clear whether the funding ​would come directly from the ​development zone's administrative authority or through its investment vehicles.

CXMT and the Beijing municipal government did not respond to requests for ⁠comment.

The planned capacity and total investment for the proposed fab were not immediately known. Building a fab that can produce leading-edge DRAM chips usually costs more than $10 billion.

CXMT operates two 12-inch DRAM fabs ​in Hefei and one in Beijing, each with capacity of about 100,000 wafers per month, the people said.

THE 'HEFEI MODEL' The discussions began before CXMT's stock market debut last week, which provided the company with fresh capital for an expansion drive during a memory-chip upcycle fueled by demand from AI infrastructure, data centres and consumer electronics. The shares have since gained 13%.

The company has become a key pillar of Beijing's drive to build a self-sufficient chip industry and narrow the gap with the U.S. in strategic technologies such as AI amid a fierce tech rivalry between the two superpowers.

Although CXMT is the world's fourth-largest DRAM producer, it remains ‌far smaller than Samsung Electronics, SK Hynix and Micron, whose combined global market share approached 90% in the first quarter, according to data from Counterpoint Research.

Within China, however, CXMT's growing dominance has enabled it to raise prices for customers such as Huawei, Reuters reported ​last month.

The company's rise ​has been closely linked to the "Hefei model," under ⁠which the capital of Anhui province has used state funding to nurture strategic technology companies.

Beijing and Shanghai have also provided CXMT with funding and other support, according to a separate person with direct knowledge of the matter, as the cities seek a larger share of the economic and strategic benefits generated ​by the company's growth. The Shanghai municipal government did not respond to a request for comment.

CXMT's Beijing-based fab, operated by Changxin Jidian, was founded in 2020 and received funding from E-Town Capital, a state-backed investment arm of the Yizhuang development zone, and its affiliate Beijing E-Town Technology, according to corporate records.

The Beijing development area is a manufacturing base for technology and chip companies, including contract chipmaker SMIC , chip equipment maker Naura Technology and smartphone and electric-vehicle maker Xiaomi.

The area is also positioning itself as a hub for robotics and AI. Last year, it hosted what organisers described as the world's first humanoid robot half-marathon, part of an effort to promote and test embodied-AI technologies.