The agreement, which spans between three and five years according to sources familiar with the matter, covers the supply of DRAM chips for server infrastructure used in cloud computing, databases, and artificial intelligence workloads.
While the exact terms remain undisclosed, the contract is seen as a significant commercial endorsement for CXMT, particularly as it prepares for what could be one of China’s biggest listings in recent years on the Shanghai STAR Market.
DRAM at the centre of AI and cloud expansion
DRAM (dynamic random-access memory) plays a critical role in modern computing systems, enabling servers to process large volumes of data efficiently without performance bottlenecks. Its importance has surged alongside the rapid expansion of cloud computing and AI systems, which demand massive and stable memory supply chains.
The deal comes amid a prolonged global shortage of memory chips that has pushed prices sharply higher and intensified competition among cloud and internet giants to secure long-term supply contracts.
“Explosive growth” driven by AI demand
Industry data cited by analysts shows DRAM contract prices surged nearly 95% in early 2026 alone, as demand from hyperscalers accelerates.
Investment banks now expect the memory chip cycle to extend through at least 2027, with the global market projected to reach as much as $1.2 trillion in value.
Against that backdrop, CXMT—backed by Chinese state support since its founding in 2016—has rapidly climbed the global rankings. It now holds an estimated 7.7% share of the global DRAM market, making it the world’s fourth-largest producer.
The company’s financial performance has surged alongside the upcycle, with first-quarter revenue reportedly reaching 50.8 billion yuan, a 700% year-on-year increase, and net profit climbing to 25 billion yuan from a loss a year earlier.
Strategic importance for China’s tech ecosystem
The agreement with Tencent reflects a broader shift in China’s technology supply chain, where domestic internet giants are increasingly turning to local semiconductor firms to reduce exposure to global supply risks.
Alibaba Cloud, ByteDance, Lenovo, and Xiaomi are also among CXMT’s reported customers, according to its IPO prospectus.
Sources say CXMT is in discussions with additional major Chinese tech firms on similar long-term supply arrangements, as demand for AI and cloud infrastructure continues to accelerate.
IPO momentum builds
The deal arrives at a critical moment for CXMT, which received approval from the Shanghai Stock Exchange in May to raise approximately 29.5 billion yuan through its STAR Market IPO.
The agreement with Tencent is expected to strengthen investor confidence by demonstrating strong domestic demand for its chips ahead of the listing.
Expansion plans and technical challenges
CXMT is also aggressively expanding production capacity, including new fabrication facilities in Shanghai, alongside existing DRAM fabs in Hefei and Beijing.
The company currently produces around 300,000 wafers per month, but planned expansions could double output to roughly 600,000 wafers monthly.
However, despite rapid growth, the company still faces technical hurdles. Reports indicate CXMT has struggled with lower production yields on its next-generation DDR5 chips, highlighting the gap that remains between it and global leaders such as Samsung Electronics and SK Hynix.
A fast-moving global memory race
The Tencent agreement underscores how the global semiconductor landscape is being reshaped by AI-driven demand, geopolitical supply concerns, and rising competition in memory manufacturing.
As CXMT scales up production and prepares for its public listing, the company is positioning itself as a central player in China’s push for semiconductor self-sufficiency—while operating in one of the most competitive technology markets in the world.