China’s leading memory chip manufacturers are leveraging a global surge in artificial intelligence (AI) demand to dictate pricing and secure multi-billion dollar contracts, according to reports from Reuters and Business World. ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies Corp (YMTC)—often referred to as the “twin stars” of memory—have transitioned from loss-making entities reliant on government funding to influential market players capable of charging prices that exceed those of larger South Korean competitors like Samsung and SK Hynix.
AI Boom Drives Market Influence
The global expansion of AI data centers has transformed memory chips, including DRAM and flash memory, into some of the world’s most sought-after components. This shift has granted CXMT and YMTC newfound pricing power, allowing them to pick their clients and raise rates as buyers scramble for supply.
This shift in dynamics has led to friction with major domestic partners. Reuters reports that CXMT has been hiking prices for Huawei, one of China’s largest technology companies. This dispute reportedly escalated when CXMT expelled engineers from SiCarrier, a Huawei-linked equipment supplier, from its research and development facility in Hefei. While the companies continue to do business, the incident underscores the growing leverage held by Chinese memory makers.
Blockbuster Deals and Public Ambitions
The increased demand has resulted in massive supply agreements for CXMT. The company recently signed a five-year deal with ByteDance, the owner of TikTok, valued at more than $7 billion. Additionally, Business World reports that CXMT previously signed a supply agreement with Tencent valued at over $3 billion.
Both “twin stars” are utilizing this growth to move toward public listings:
- CXMT: The company is preparing for a debut on the Shanghai stock market after raising $8.6 billion through an initial public offering. It is also constructing new manufacturing facilities to expand production.
- YMTC: The firm is likewise preparing for a public listing and expanding its manufacturing capacity.
U.S. Scrutiny and Geopolitical Tension
The rise of these firms has placed them on a collision course with Washington. The Pentagon has designated both CXMT and YMTC as Chinese military companies, alleging they support China’s military-civil fusion strategy—a charge the companies deny. YMTC is already on the U.S. Entity List, which restricts its access to U.S.-origin software, tools, and suppliers used in chip production.
Further restrictions on chipmaking equipment are currently being debated in Congress. However, sources told Reuters that the Trump administration is divided on whether to increase the crackdown. Apple has reportedly argued that it requires Chinese memory and has sought assurances that CXMT will not be added to the Entity List.
Broader Context of China’s Chip Sector
The growth of memory makers aligns with a broader trend in the Chinese semiconductor industry. Counterpoint Research notes that Chinese foundries, such as SMIC and Nexchip, are benefiting from “overflow” as industry leader TSMC concentrates its capacity on leading-edge nodes for AI chips, pushing mature-node orders toward second-tier foundries. This is further bolstered by a semiconductor-localization trend where domestic customers increasingly source chips locally.
Simultaneously, Huawei continues to expand despite U.S. export controls. Analysts expect Huawei to close 2026 with approximately $12 billion in chip revenue, up from $7.5 billion in 2025. This growth coincides with the emergence of the Ascend 910B chip, designed to compete with Nvidia’s offerings.
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