Analysis of Government Subsidy Proportion and Profitability Sustainability of ChangXin Technology

Based on the Sci-Tech Innovation Board (STAR Market) IPO prospectus of ChangXin Technology Group Co., Ltd. and relevant public information, the following is a systematic analysis from two dimensions: government subsidy proportion and profitability sustainability.

---

As a leading domestic DRAM memory chip enterprise, ChangXin Technology has received strong support from the central and local governments. From the perspective of equity structure, the company’s major shareholders include a large number of state-owned background entities [1]:

Shareholder Category	Shareholder Name	Shareholding Ratio
Anhui State-owned Assets	Qinghui Jidian (Hefei state-owned assets hold 99.9% of LP shares)	21.67%
Local State-owned Assets	ChangXin Integration (100% held by Hefei Industrial Investment)	11.71%
National Capital	National Integrated Circuit Industry Investment Fund Phase II	8.73%
Local State-owned Assets	Hefei Jixin	8.37%
Local State-owned Assets	Anhui Provincial Investment	7.91%

The total shareholding of the above-mentioned state-owned background shareholders exceeds 58%, reflecting the continuous investment from the national strategic level in semiconductor independent controllability [2].

According to the prospectus and verification materials from the sponsor, government subsidies account for approximately

of ChangXin Technology’s project investment [3]. Specifically:

• The company plans to raise RMB 29.5 billion for projects including technical upgrading and transformation of memory wafer manufacturing mass production lines, DRAM memory technology upgrading, and forward-looking technology research and development of dynamic random-access memory
• The total project investment scale reaches RMB 34.5 billion, of which government subsidies account for approximately 71.97% [4]

It should be noted that such a high proportion of government support is common in the strategic semiconductor industry, reflecting the special status of the DRAM industry as an important cornerstone of national information infrastructure strategic security.

In addition to direct government subsidies, ChangXin Technology has also received multiple rounds of large-scale equity financing support:

Financing Round	Time	Valuation/Financing Amount	Major Investors
Establishment Phase	2016	Approximately RMB 1.8 billion	Hefei Municipal Government + GigaDevice
National Integrated Circuit Industry Investment Fund Phase II	2020	Billions of RMB	National Integrated Circuit Industry Investment Fund, Xiaomi Yangtze River Fund, etc.
Three Rounds of Financing in 2021	2021	Over RMB 39 billion	More than 10 top-tier institutions
Investment by GigaDevice et al.	2024	RMB 10.8 billion	GigaDevice et al.
Alibaba Cloud Investment	June 2025	RMB 6.1 billion / 3.85% equity	Alibaba Cloud Computing

As of June 2025, Alibaba Cloud Computing invested RMB 6.1 billion to acquire 3.85% equity of ChangXin Memory, and the pre-IPO valuation of the company is estimated to be approximately

[5].

---

ChangXin Technology has been in a state of continuous losses since its establishment in 2016, with the main reasons including:

Indicator	2022	2023	2024	January-September 2025
Operating Revenue (RMB 100 million)	82.87	90.87	241.78	320.84
Net Profit Attributable to Parent (RMB 100 million)	-91.71	-192.24	-90.50	-59.80
Cumulative Loss (RMB 100 million)	-	-	-408.57	-434.25

:

• Huge early-stage R&D investment (cumulative R&D investment from 2022 to H1 2025 reached
  RMB 18.867 billion
  , accounting for 33.11% of operating revenue)
• Fixed asset depreciation pressure of 12-inch wafer fabs (depreciation reached RMB 14.875 billion in 2024)
• Heavy asset operation characteristics under the IDM (Integrated Device Manufacturing) model [6]

In Q3 2025, ChangXin Technology’s net profit attributable to parent after excluding non-recurring items has

(approximately RMB 1.324 billion), marking the company’s entry into a new stage of improved profitability [7]. According to the full-year performance forecast disclosed in the prospectus:

Indicator	2025 Forecast
Operating Revenue	RMB 55-58 billion
Net Profit	RMB 2-3.5 billion (turned positive)
Net Profit Attributable to Parent	RMB -1.6 to -0.6 billion (significant loss reduction)
Net Profit Attributable to Parent Excluding Non-recurring Items	RMB 2.8-3 billion

The company expects to achieve overall profitability in 2026 or 2027 [8].

The current DRAM market has entered a “super bull market” phase, with prices hitting a new high in nearly 8 years:

• The price of DRAM products rose by 21.3% in Q2 2025
• The price of 32GB DDR5 products rose from USD 135 in July 2025 to USD 380 in January 2026, with an
  increase of over 230%
• The price of server DRAM is expected to continue to rise by 60%-70% in Q1 2026 [9]

• DDR5 products achieved mass production at the end of 2024, with unit production costs continuously decreasing
• Year-on-year decreases of 10.16% in 2023 and 25.70% in 2024
• Further decreased by
  17.85%
  in H1 2025 compared to the full year of 2024
• The compound annual growth rate (CAGR) of sales volume of major DRAM products reached as high as
  82.34%
  [10]

According to Omdia data, based on DRAM sales revenue in Q2 2025:

• ChangXin Technology’s global market share has increased to
  3.97%
• Becoming the
  largest DRAM manufacturer in China and the 4th largest globally
• Its DDR5 market share is expected to rise from less than 1% at the beginning of 2025 to 7% by the end of the year
• Its LPDDR5 market share surged from 0.5% to 9% [11]

Although the profitability inflection point has emerged, ChangXin Technology still faces the following challenges:

Risk Type	Specific Description
Cycle Dependence Risk	Profitability is highly dependent on the industry’s price increase cycle, and independent profitability remains to be verified
Technology Iteration Pressure	Memory chip technology iterates rapidly, requiring continuous huge R&D investment to maintain competitiveness
Market Share Gap	There is still a large gap with Samsung (40.35%), SK Hynix (33.19%), and Micron (20.73%)
International Competition Strategy	The three major giants may adjust their capacity strategies to cope with competition

---

ChangXin Technology’s government subsidy accounts for approximately

of its related investment, and this proportion is reasonable in the strategic semiconductor industry:

• Aligns with the key support directions of the National Informatization Development Strategy Outline and the 14th Five-Year Plan
• Reflects the strategic layout of the whole-nation system to tackle “chokepoint” problems
• State-owned background shareholders provide long-term stable capital support and policy guarantees

：Strong profitability sustainability

• AI computing power demand remains strong, and the tight supply-demand pattern of DRAM is expected to continue until 2027
• The scale effect brought by mass production of DDR5/LPDDR5X products will continue to be released
• Capacity utilization rate has reached 94.63%, and marginal costs are expected to continue to decline

：Need to pay attention to the following variables

• Changes in the global memory chip cycle
• Technology iteration capability (1b nm DRAM and more advanced processes)
• Customer structure optimization and deepening of domestic substitution

：ChangXin Technology is at a critical node in its transformation from “strategic loss” to “scale effect profitability”. The AI-driven super cycle of memory chips provides a rare historic window for it. If it can grasp this round of industry opportunities, the company is expected to achieve stable profitability in 2026 and gradually establish independent and sustainable profitability.

---

[1] Securities Times - “Domestic DRAM memory giant ChangXin Technology’s STAR Market IPO application accepted” (https://www.stcn.com/article/detail/3566930.html)

[2] Jiemian News - “From a huge loss of RMB 37 billion to profit reversal: Insights from ChangXin Technology’s IPO” (https://m.jiemian.com/article/13874829.html)

[3] Securities Times - “The first memory chip stock’s epic IPO! RMB 300 billion ChangXin Technology is coming” (https://www.stcn.com/article/detail/3571683.html)

[4] Sina Finance - Relevant charts from ChangXin Technology’s prospectus

[5] China Business Journal - “ChangXin Technology launches listing counseling, targeting the first memory chip stock with a valuation of RMB 140 billion” (https://cj.sina.cn/articles/view/1650111241)

[6] Shanghai Stock Exchange - IPO prospectus of ChangXin Technology Group Co., Ltd. (http://static.sse.com.cn/stock/disclosure/announcement/)

[7] MyDrivers - “Memory is the most expensive in 8 years! RMB 300 billion ChangXin takes on international giants alone” (https://news.mydrivers.com)

[8] The Paper - “ChangXin Technology’s STAR Market IPO application accepted: H1-3 operating revenue exceeds RMB 32 billion” (https://m.thepaper.cn/newsDetail_forward_32289436)

[9] C Finance - “New vitality in A-shares: Domestic DRAM leader ChangXin Technology’s profitability inflection point has emerged” (https://caijing.chinadaily.com.cn)

[10] EET-china - “Officially announced! ChangXin raises RMB 29.5 billion to sprint for STAR Market listing” (https://www.eet-china.com/mp/a463906.html)

[11] National Business Daily - “Big chip news! ChangXin Memory officially announces: Two products rank first in the industry in dual dimensions” (https://www.nbd.com.cn/articles/2025-11-23/4153822.html)