Tencent Places $2.9B DRAM Order Ahead of CXMT IPO

According to a Reuters report on June 29, Chinese DRAM manufacturer ChangXin Memory Technologies (CXMT) has signed a long-term supply agreement worth more than RMB 20 billion (approximately USD 2.94 billion) with Tencent Holdings, just ahead of its planned listing on Shanghai’s STAR Market.

Citing three sources familiar with the matter, Reuters reported that the multi-year agreement is designed to secure DRAM chip supplies for Tencent’s server infrastructure. The deal is considered one of the largest procurement commitments between a domestic Chinese semiconductor manufacturer and a major internet company in recent years.

Two sources indicated that the contract could extend for up to three years, while another source suggested the agreement may last as long as five years. Specific details regarding product types, purchase volumes, and final contract duration have not been publicly disclosed. Neither CXMT nor Tencent has officially commented on the report.

CXMT is currently China's largest DRAM manufacturer and has successfully commercialized advanced memory products, including DDR5 and LPDDR5X. According to market research firm Counterpoint Research, the company has experienced rapid growth in recent years. Its share of the global DRAM market increased from 3% in the first quarter of 2025 to 8% in the first quarter of 2026, more than doubling year over year and strengthening its position as the world's fourth-largest DRAM producer.

The agreement comes amid an unusually tight global DRAM supply environment in 2026. Data from UBS shows that DRAM contract prices surged approximately 95% quarter over quarter in the first quarter of 2026. The firm expects the current memory upcycle to continue through at least the end of 2027.

Meanwhile, a recent report from Jefferies forecasts that DRAM prices will rise by 40% to 50% quarter over quarter in the third quarter of 2026, followed by an additional 30% to 40% increase in the fourth quarter. The research firm also expects memory chip average selling prices (ASPs) to maintain year-over-year growth of 40% to 45% throughout 2027.

The global memory shortage has been intensified by strategic production shifts among leading memory manufacturers. Major international memory companies, including Samsung Electronics, SK hynix, and Micron Technology, have increasingly allocated manufacturing capacity toward higher-margin products such as High Bandwidth Memory (HBM) and server DRAM. These products are primarily supplied to large international customers, including NVIDIA, Microsoft, Amazon, Google, and Apple, leaving limited capacity available for growing demand from Chinese cloud service providers.

For Tencent, securing long-term DRAM supply from CXMT represents both a cost-management strategy and a broader effort to strengthen supply chain resilience. As global technology competition continues to reshape semiconductor supply chains, reducing dependence on overseas memory sources has become an increasingly important strategic consideration for Chinese technology companies.

The agreement also arrives at a critical moment for CXMT’s parent company, ChangXin Technology. In May 2026, the Shanghai Stock Exchange approved the company’s application to launch an initial public offering (IPO) on the STAR Market. The company plans to raise approximately RMB 29.5 billion, potentially making it one of the largest domestic IPO projects in mainland China in recent years.

For CXMT, the long-term order valued at more than RMB 20 billion serves as a significant validation of its manufacturing capabilities ahead of the IPO. The agreement reflects confidence in the company’s DRAM product performance, production yield, and supply reliability. It also enhances CXMT’s reputation among large-scale enterprise and cloud computing customers, potentially creating new opportunities for future partnerships.

Beyond its commercial significance, the multi-year contract provides CXMT with greater revenue visibility and long-term capacity utilization stability. By securing a substantial and predictable demand base, the company can better manage future capacity expansion plans while reducing investment risks associated with the highly cyclical memory semiconductor market.