Memory chips that help devices run apps and store files were once a low-profit business.
By Mahnoor | 24-07-2026
For months, a Chinese chip maker called ChangXin Memory Technologies (CXMT) had been raising prices for Huawei, one of China’s biggest tech companies. Even when Huawei asked for a break from the rising costs, the chip maker didn’t give in, according to two people who know about the situation.
The fight reached a critical point in June at CXMT’s factory. A group of engineers from a company that makes chip equipment and has strong ties to Huawei were working in the clean rooms at CXMT’s main research and development area in Hefei, Anhui province. Without any warning, CXMT told the engineers, who had been helping with equipment repair, to pack up their tools and leave the factory floor right away, the two sources said.
People told Reuters that leaders at SiCarrier, a company that makes equipment for Huawei, decided the conflict happened because of a fight for power between CXMT and Huawei. The two people said the companies still work together, but the engineers are not allowed to go back to the research area.
CXMT, Huawei, and SiCarrier didn’t answer questions about the event.
People told Reuters that leaders at SiCarrier, a company that makes equipment for Huawei, decided the conflict happened because of a fight for power between CXMT and Huawei.
The two people said the companies still work together, but the engineers are not allowed to go back to the research area. CXMT, Huawei, and SiCarrier didn’t answer questions about the event.
But the global building of AI data centers has turned simple computer parts into some of the world’s most wanted products, causing fights over prices and a rush to get supplies. The Chinese memory chip makers are now choosing their customers and setting prices, four people who know about the matter told Reuters. In some cases, they are charging more than their bigger South Korean competitors, Samsung and SK Hynix, because the huge demand for memory chips forces Chinese buyers to pay more and more.
This month, CXMT signed a five-year deal with ByteDance, the Chinese owner of TikTok, worth over $7 billion, three people who know about the agreement told Reuters. ByteDance did not reply to a request for comment about the deal, which hasn’t been reported before.
This story about how CXMT and YMTC are using their new power comes from talks with over a dozen people, including bosses, engineers, suppliers, and US officials. It also looks at 50 Chinese government papers and company reports. It shows new facts about how they set prices, make plans, and do deals as these two companies—called the ‘twin stars’ of memory in China—rush to big stock market launches.
Neither chipmaker answered questions about their prices, plans, or the growing US attention on their market power.
Chinese companies have a strong hold on chip supply, which is creating a conflict with Washington. The Pentagon says these companies are helping China’s military-civil fusion plan and has called them Chinese military companies, but the companies deny this. YMTC is already on the US Entity List, which limits its use of American suppliers, software, and tools for making memory chips.
Congress is thinking about new rules to further limit these companies’ access to chip-making machines. However, according to four people who know about the talks, the Trump administration is split on whether to take strict action against them.
Apple said it needs Chinese memory chips and asked for promises that CXMT won’t be put on the blacklist, two sources said. Last year, a US committee approved adding CXMT to the trade blacklist, which is run by the Commerce Department, but officials delayed it, Reuters reported last month.
Micron, the main Western rival to Chinese companies, has urged US lawmakers to add more limits on CXMT and YMTC, such as blocking their access to chip-making tools.
Apple and Micron did not answer questions about the talks. The White House and the Commerce, Defense, and State departments also did not reply to requests for comment.
Getting ready to sell shares to the public
The global fight hasn’t stopped Chinese chip companies from going public.
CXMT, which will start selling its $8.6 billion IPO in Shanghai on Monday, has made up for ten years of losses in just six months. It earned $7.5 billion in the first quarter — a 719% jump from last year.
As YMTC gets ready to sell shares to the public, some leaders inside the company want it to be worth 1 trillion yuan ($148 billion), two people said.
Both companies are backed by the Big Fund, a Chinese government-supported chip investment group. They also got help from local and provincial governments, like Anhui province for CXMT and Hubei province for YMTC. The provincial officials and the investment fund didn’t reply to questions.
Chinese officials see these companies as key parts of the country’s plan to become more independent in technology, according to official documents and reports.
Now, these chip makers are challenging their competitors directly.
YMTC started selling in South Korea in June, launching its own brand for memory storage and taking advantage of a gap left by Samsung, SK Hynix, and US company Micron, which moved away from that area to work on more advanced chips.
CXMT plans to enter the US market in the long run, say three sources, but its production is limited by strong demand in China.
Chinese officials told CXMT and YMTC to first give chips to Chinese companies, three other people told Reuters. But the chip makers also plan to build more factories, which could let them serve both China and other countries as soon as 2027, when new plants start working.
CXMT is building two new plants in Shanghai and Hefei and is talking to local officials in other places about a third, according to three sources. These projects will more than double their ability to make chips, to over 600,000 wafers each month. If all goes well, CXMT’s ability to make chips will be bigger than Micron’s by 2030, one person said.
Reuters said in April that YMTC wants to build two more factories, besides one that will be finished this year.
Even though these Chinese memory makers are becoming more powerful, they have limits. Both companies use deep ultraviolet lithography machines from the Dutch company ASML. These machines print tiny circuits to make chips. The Dutch government has been pushed by the US to stop selling advanced lithography machines to Chinese companies. This is because the machines are important for making top-level semiconductors that could be used for military purposes, and because the machines have US technology inside them.
Chinese memory makers have rivals in Korea and America. These rivals make advanced DRAM chips with ASML’s very good EUV machines. China cannot get these machines because the Dutch government stopped giving export licenses in 2019. Chinese company CXMT makes its own high-speed memory chips that AI needs.
But five sources say CXMT is still two generations (several years) behind its rivals. Analyst Ray Wang at SemiAnalysis says: ‘If more rules block the machines that make chips, that will be the hardest part for Chinese memory makers. China is far behind in this type of equipment.’
ASML did not say anything about how future export rules might affect them.
YMTC is less likely to be hurt than CXMT if this happens. Since being put on the US blacklist in 2022, YMTC has changed about half of its machines to Chinese ones and found new ways to stack memory parts using simpler tools, two sources said.
Price pressure
Chinese memory chips were once seen by foreign business leaders as lower-cost options compared to Western and South Korean products. But that has changed, six people told Reuters. In recent weeks, CXMT has charged more than Samsung’s price of about $1,240 per unit for similar 64-gigabyte DDR5 server memory modules, two of these people said. They wouldn’t say the exact CXMT price.
Samsung didn’t answer questions. SK Hynix also refused to comment.
This year, some Chinese electronics and tech companies told China’s Ministry of Industry and Information Technology that CXMT and YMTC raised their prices. They said these price increases delayed their product launches. Two people who know about this said the companies that complained didn’t want to be named.
The ministry didn’t answer questions about this story, but in April it said it would stop memory-chip hoarding that tries to make prices go up.
The government has also guided demand to local chip sellers. State-owned companies in China are not allowed to buy from foreign memory producers, based on two sources.
The deal for chip supply between CXMT and ByteDance came after a June agreement between the chip maker and Tencent worth over $3 billion. Tencent didn’t reply when asked for comment.
At YMTC, Chairman Chen Nanxiang had predicted this moment. He told Chinese state media in 2024 that, ‘even though the industry has not yet experienced a big growth, that time will come within three to five years.’
By early this year, when the company started choosing which customers to work with for the first time, Chen and his top leaders were happy, according to two people who know about it. The big growth he expected had come.
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