Chinese memory chipmaker ChangXin Memory Technologies has signed a long-term supply agreement with Tencent worth more than 20 billion yuan, or around $2.94 billion, according to Reuters.
The deal gives Tencent access to server DRAM chips over several years, as demand for memory continues to rise across cloud computing, databases and AI workloads. It also gives CXMT a major commercial endorsement ahead of its planned Shanghai listing.
CXMT Secures Major Tencent Deal
The agreement is expected to run for between three and five years, according to Reuters, which cited people familiar with the matter.
DRAM, or dynamic random-access memory, is used by servers to process active data quickly. It’s a key part of data centre infrastructure because cloud platforms and AI systems need fast access to memory to run applications without delays.
Reuters said it wasn’t immediately clear whether the deal includes high-bandwidth memory, or HBM. HBM is used in advanced AI chips and has become one of the most important parts of the AI hardware supply chain.
CXMT and Tencent didn’t immediately respond to Reuters’ requests for comment.
Deal Comes Ahead Of Planned IPO
The Tencent agreement comes as CXMT prepares for a major stock market debut in Shanghai.
The company received approval from the Shanghai Stock Exchange in May for an initial public offering on the STAR Market. It’s aiming to raise 29.5 billion yuan, which would make it one of mainland China’s largest listings in recent years.
CXMT was founded in 2016 with government backing and has become central to China’s effort to build a stronger domestic chip supply chain. The company is now China’s leading DRAM maker and, according to Reuters, was the world’s fourth-largest DRAM supplier in 2025 with around 7.7% market share.
Its growth has been sharp. Reuters reported that CXMT’s first-quarter revenue reached 50.8 billion yuan, up 700% year-on-year. The company also posted a net profit of 25 billion yuan, compared with a 1.6 billion yuan loss a year earlier.
Memory Demand Rises With AI Growth
The deal reflects rising demand for memory chips as major technology companies build more AI and cloud infrastructure.
Large internet and cloud companies have been trying to secure long-term supply agreements as global memory demand increases. Reuters cited UBS data showing DRAM contract prices rose roughly 95% quarter-on-quarter in the first quarter of 2026.
CXMT is also reportedly in talks with other major Chinese internet companies about similar supply arrangements. Its IPO prospectus lists Tencent, Alibaba Cloud, ByteDance, Lenovo and Xiaomi among its major customers.
To support demand, CXMT is expanding production. Reuters reported that the company is building a new DRAM plant in Shanghai, in addition to its existing facilities in Hefei and Beijing.
The company currently has combined capacity of around 300,000 wafers per month. With new capacity, that could rise to around 600,000 wafers per month.
Samsung And SK Hynix Remain The Benchmark
While CXMT is growing quickly, Samsung Electronics and SK Hynix remain the global leaders in memory chips.
Reuters described CXMT as still trailing the South Korean companies technologically. The company has also reportedly faced low production yields on its newer DDR5 memory products, showing that scaling output and matching global leaders are not the same challenge.
Samsung and SK Hynix are now preparing their own major expansion in South Korea.
The South Korean government said on Monday that both companies plan to build two new fabrication sites each in the country’s southwest region. The projects form part of a wider national semiconductor initiative valued at 800 trillion won, or around $518 billion.
The plan is designed to support South Korea’s chip production ecosystem and strengthen the country’s position in AI semiconductors.
AI Chip Race Drives Memory Expansion
The CXMT-Tencent deal and South Korea’s fabrication plan point to the same pressure in the global chip market: AI systems need more memory, and major technology companies want more control over future supply.
For Tencent, the CXMT deal offers long-term access to server memory at a time when AI and cloud demand are increasing pressure on global chip supply.
For CXMT, it brings a major customer commitment before its planned IPO and strengthens its position in China’s domestic semiconductor market.
For Samsung and SK Hynix, South Korea’s new investment plan reinforces their role as the benchmark that newer memory suppliers are still trying to catch.
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