Exclusive: CXMT plans second chip plant in Beijing, in talks on funding

Reuters | Mon, August 3, 2026 at 1:24 AM PDT | 3 min read

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

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

Key Details

• Location: The new 12-inch plant would be built in Yizhuang, approximately 20 km (12 miles) southeast of central Beijing, where CXMT already operates a fab producing dynamic random access memory (DRAM) chips.
• Funding: CXMT is seeking at least 60 million yuan ($8.9 million) in support from the Beijing Economic-Technological Development Area. Other state-owned tech companies have also expressed interest in participating in the financing.
• Status: Talks are at an early stage, and the size and structure of any funding package could change. It is unclear whether funding would come directly from the development zone's administrative authority or through its investment vehicles.

Background

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

CXMT currently operates two 12-inch DRAM fabs in Hefei and one in Beijing, each with a capacity of approximately 100,000 wafers per month.

The planned capacity and total investment for the proposed Beijing fab were not immediately known. Building a fab capable of producing leading-edge DRAM chips typically costs more than $10 billion.

The 'Hefei Model'

Discussions regarding the new plant began before CXMT's stock market debut last week, which provided fresh capital for expansion during a memory-chip upcycle fueled by demand from AI infrastructure, data centers, and consumer electronics. Shares have since gained 13%.

CXMT has become a key pillar of Beijing's drive to build a self-sufficient chip industry and narrow the technological gap with the U.S., particularly in strategic areas such as AI.

While 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 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 cities seek a larger share of the economic and strategic benefits generated by the company's growth.

Corporate Structure

CXMT's existing 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 serves as a manufacturing base for technology and chip companies, including contract chipmaker SMIC, chip equipment maker Naura Technology, and smartphone and electric-vehicle maker Xiaomi.

Response Status

CXMT and the Beijing municipal government did not respond to requests for comment. The Shanghai municipal government also did not respond to a request for comment.