Remember CXMT?

If not, don’t worry: I didn’t either. I had to use my own “Search” box to see if I’d written about the company before. As it turns out, I have. And quite recently.

That I didn’t recall an article I wrote less than three months ago testifies rather loudly to the notion that getting old “generally sucks,” as I put it earlier this week (at least I can still remember what I wrote yesterday). Or it’s a testament to the sheer amount of content I create. Or to permanent damage inflicted by over a decade spent drowning my synapses in hard liquor. (All three. It’s all three.)

Anyway, CXMT is a Chinese company that went public this year in what counted as the second-largest mainland IPO ever. They make what I could apparently use: Memory. Indeed, CXMT is the fourth-largest DRAM maker behind only Samsung, Micron and SK Hynix. The shares are viewed as one of the only pure-plays on Xi Jinping’s bid to make China a player in the global AI infrastructure buildout.

I bring the company up on Tuesday because according to itself, CXMT’s on the brink of rolling out server memory with higher-density cells. Specifically, the company says it reached a key threshold that’d theoretically allow it to put half again as many cells in the same space.

Note “theoretically.” As with a lot of claims made by Chinese tech firms that aren’t Tencent, Alibaba and Baidu, it wasn’t immediately possible to assess the veracity of CXMT’s claim. But if the company’s telling the truth, it means they hit an industry milestone before Samsung and SK Hynix — at least in terms of bringing the technology to market.

That’d be notable enough on its own, but it’s made even more compelling (or concerning, depending on who you are) in the context of restrictions which limit Chinese companies’ access to ASML’s bleeding-edge equipment.

In layman’s terms: If CXMT’s claim is true and it can manufacture this kind of memory consistently, at scale, then it’s yet another piece of evidence to support the contention that export controls won’t work to prevent China from making great leaps forward (sorry) in the AI race.

This is insult to injury for semis, which were already backfooted. Samsung and SK Hynix both dropped precipitously, dragging the Kospi down a fifth consecutive session, a stretch during which each successive daily decline was larger than the last.

The figure above shows you the SOX. It too is down five days running for a cumulative loss of more than 8%. At the lows in late-July, the SOX was down almost 30% from the prior month’s nosebleed highs.

Remember: “There’s a lot riding on the chips.” S&P earnings growth is highly sensitive to semi margins, and although Micron hit it out of the park two weeks ago, the shares are down double-digits since its earnings report.

Between them, Micron and Nvidia are seen accounting for a third of index EPS growth this year, and — get this —  almost 40% of overall S&P 500 profit growth 2027.

In the latest installment of BofA’s Global Fund Manager survey, “long global semis” (which basically just means Samsung, Micron, SK Hynix and Nvidia) was again identified as the most-crowded trade.

As the figure shows, chip stocks took 45% of the vote, which the bank’s Michael Hartnett was keen to note is well below the 82% share in July, when the space was on the way to correcting sharply following a stratospheric run-up.

The good news for the “good” guys (i.e., for the US and South Korean memory oligopoly) is that there’s no guarantee CXMT actually achieved commercial production capacity for the new memory.

And as Bloomberg put it Tuesday, the company’s breakthrough anyway “shouldn’t pose an immediate threat to Samsung, SK Hynix and Micron’s dominance in HBM,” even as it demonstrates how China’s “incrementally closing the gap across the broader memory sphere.”