China's largest memory semiconductor corporation CXMT is expected to resume capital expenditures based on funds secured through an initial public offering (IPO) on the Chinese stock market. With global "memory chaos" driving a surge in DRAM demand and mass production of high bandwidth memory (HBM) ahead, analysts say the corporation will push ahead with facility investments to expand production capacity. South Korean semiconductor equipment corporations supplying tools to CXMT are on high alert over whether they will win orders.
According to the industry on the 19th, CXMT is expected to resume new equipment orders as early as the second quarter of this year. CXMT is said to be planning an IPO in the first half of the year and, based on this, is expected to raise about 29 billion yuan (about 6.114 trillion won). The industry expects CXMT to carry out facility investments with a capacity of up to 40,000 wafers per month.
CXMT had been making large-scale facility investments, but the pace of expanding production capacity has recently slowed due to U.S. regulations on the semiconductor industry. However, as DRAM demand has surged in step with global growth in artificial intelligence (AI), "memory chaos" has also unfolded in the domestic market as supply fails to keep up, making capacity expansion unavoidable. In addition, with CXMT reportedly planning to mass-produce fourth-generation HBM (HBM3) this year, it appears likely to speed up facility investments. CXMT is understood to be preparing to mass-produce and supply HBM3 for Huawei AI chips.
With signs that CXMT will resume equipment orders, the domestic equipment sector is rushing to prepare supplies. Jusung Engineering, NEXTIN, and Mirae Industries are said to be supplying equipment to CXMT. Jusung Engineering supplies atomic layer deposition (ALD) tools that stack thin, uniform films on semiconductor wafer surfaces; NEXTIN supplies tools that inspect microdefects on wafer surfaces; and Mirae Industries supplies tools that inspect semiconductor chips after packaging is complete.
There is also an outlook that YMTC, a Chinese NAND flash manufacturer, will proceed with a listing this year and then jump into facility investments, improving earnings for semiconductor equipment corporations with a high share of Greater China sales. According to financial data company FnGuide, Jusung Engineering's operating profit is projected to rise from 31.2 billion won last year to 85.6 billion won this year, while NEXTIN is expected to swing to a profit of 39.1 billion won this year from a loss last year. The Korea IR Association projected Mirae Industries' operating profit this year at 20.1 billion won, a sharp increase from the previous year (about 9.14265 billion won).
However, some analysts say the benefits for the domestic equipment industry could be limited as China encourages the use of homegrown equipment. According to market research firm TrendForce, the adoption rate of domestic semiconductor manufacturing equipment in Chinese semiconductor production lines has reached about 35%. That exceeds the Chinese government's 2025 target of about 30%.
A semiconductor industry official said, "As China's semiconductor sector puts everything into internalization, the technological prowess of semiconductor equipment has also risen to a considerable level."